ParkerHannifin Corp. (PH) filed Quarterly Report for the period ended 2009-09-30.
Parker-Hannifin Corporation is a leading worldwide full-line manufacturer of motion control products including fluid power systems electro-mechanical controls and related components. Fluid power involvesthe transfer and control of power through the medium of liquid gas or air in hydraulic pneumatic and vacuum applications. Fluid power systems move and position materials control machines vehicles and equipment and improve industrial efficiency and productivity. Parkerhannifin Corp. has a market cap of $8.61 billion; its shares were traded at around $53.59 with a P/E ratio of 26.1 and P/S ratio of 0.8. The dividend yield of Parkerhannifin Corp. stocks is 1.9%. Parkerhannifin Corp. had an annual average earning growth of 9.8% over the past 10 years.
Highlight of Business Operations:
Net sales for the first quarter of fiscal 2010 decreased 27.0 percent over the prior-year first quarter reflecting lower volume experienced in all Segments, with the largest decline in net sales being experienced in the Industrial Segment. Acquisitions made in the last 12 months contributed approximately $76 million in net sales and the effect of currency rate changes reduced net sales by $46 million.
Other (income) expense, net in the current-year quarter included income of $3.2 million related to the restructuring of our executive life insurance program. The prior-year quarter included a $7.7 million expense related to an investment and a $1.2 million expense related to a litigation settlement.
Included in Industrial North American operating income are business realignment charges of $4.7 million and $0.9 million in the current-year quarter and prior-year quarter, respectively. Included in Industrial International operating income are business realignment charges of $12.3 million and $0.6 million in the current-year quarter and prior-year quarter, respectively. The business realignment expenses consist primarily of severance costs resulting from plant closures as well as general reductions in the work force. The Company anticipates realizing cost savings resulting from these severance costs of approximately $14 million in fiscal 2010 and $20 million in fiscal 2011. The amount of savings that is actually realized may be lower than expected if the Company needs to hire employees in the future as a result of an increase in end-user demand. The Company expects to continue to take the actions necessary to structure appropriately the operations of the Industrial Segment. Such actions may include the necessity to record additional business realignment charges in fiscal 2010, the timing and amount of which has not been finalized at this time.
Corporate general and administrative expenses decreased to $26.3 million in the current-year quarter compared to $40.4 million in the prior-year quarter. As a percent of sales, corporate general and administrative expenses for the current-year quarter decreased to 1.2 percent compared to 1.3 percent in the prior-year quarter. The lower expense in the current-year quarter is primarily due to lower incentive compensation expenses.
PH is in the portfolios of Lee Ainslie of Maverick Capital, David Dreman of Dreman Value Management, Dodge & Cox.
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