Parker-Hannifin Corp.: Q3 FY2026 earnings call

What management said about Q3 FY2026, from the documents filed with the SEC on 30 April 2026: press release. Guidance figures: 4 raised, 3 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Record sales rose 11%: Sales reached a record $5,486 million, up 11%, with organic sales up 6.5%. Diversified Industrial sales were $3,672 million and Aerospace Systems $1,814 million. Source
• Adjusted EPS reached record $8.17: Adjusted EPS rose 18% to $8.17, a record, and adjusted net income was $1,046 million against $904 million a year earlier. Source
• Orders up 9% across all businesses: Order rates were up 9% in total, with all reported businesses positive: North America up 7%, International up 6%, Aerospace Systems up 14%. Source
• Backlog rose to record $12.5 billion: Backlog reached a record $12.5 billion, up from $11.7 billion in the prior quarter, with increases in both Diversified Industrial and Aerospace Systems. Source
• Segment margin rose 20 bps: Segment operating margin was 23.4%, up 20 bps, and adjusted margin 26.7%, up 40 bps. North America, International and Aerospace Systems each reported record adjusted segment operating margin. Source
• Record year-to-date operating cash flow: Year-to-date cash flow from operations was a record $2.6 billion, $2,628 million, or 16.7% of sales, against $2,309 million a year earlier. Source

“Our global team delivered another quarter of record performance,”

Jenny Parmentier, Chairman and Chief Executive Officer

Guidance

What changed from last quarter

• Guidance raised: Reported sales, organic sales and EPS guidance raised from the prior-quarter ranges and point values. Source
• New guidance: Mid-teens adjusted EPS growth for fiscal 2026 stated; the prior release gave no adjusted EPS growth rate. Source
• New: Quarterly cash dividend raised by 11% by recent board decision. Source

Results and growth drivers

• Record sales rose 11%: Sales reached a record $5,486 million, up 11%, with organic sales up 6.5%. Diversified Industrial sales were $3,672 million and Aerospace Systems $1,814 million. Source
• Net income fell on prior-year tax benefit: Net income was $904 million, down 6%, and diluted EPS was $7.06, down 4%. The prior-year quarter included a $180 million discrete tax benefit; adjusted net income rose 16% to $1.0 billion. Source
• Adjusted EPS reached record $8.17: Adjusted EPS rose 18% to $8.17, a record, and adjusted net income was $1,046 million against $904 million a year earlier. Source
• Adjusted segment income rose: Adjusted segment operating income was $1,464 million against $1,304 million, and management listed it among the quarter's records. Source

Segments and regions

• Aerospace Systems sales and margin rose: Aerospace Systems sales rose 15.5% to $1,814 million, with organic growth of 14.2%. Segment operating margin was 25.2%, up 150 bps; adjusted margin was 29.5%, up 80 bps. Source
• North America organic growth 2.8%: North America Diversified Industrial sales were $2,141 million, up 5.4%, with organic growth of 2.8%, driven by in-plant and industrial, off-highway and energy. Segment operating margin was 22.6%, down 40 bps; adjusted margin was 25.3%, up 10 bps. Source
• International sales grew, Asia led: International sales rose 12.7% to $1,531 million, with organic growth of 3.3%; Asia grew 9.6%, Europe 0.1%, and Latin America fell 7.5%. Adjusted segment margin 25.3%, up 20 bps. Source

“With strong orders and record backlog, we are raising our outlook and now expect mid-teens adjusted EPS growth for the year.”

Jenny Parmentier, Chairman and Chief Executive Officer

Products, customers and orders

• Aerospace OEM and aftermarket both grew: Commercial OEM sales rose 22% and aftermarket sales 14% in Aerospace Systems. Aerospace order rates were up 14%, with double-digit growth in both OEM and aftermarket. Source
• Electronics and defense bookings lifted orders: International order rates were up 6%, driven by long-cycle electronics and defense bookings. Source
• Orders up 9% across all businesses: Order rates were up 9% in total, with all reported businesses positive: North America up 7%, International up 6%, Aerospace Systems up 14%. Source
• Backlog rose to record $12.5 billion: Backlog reached a record $12.5 billion, up from $11.7 billion in the prior quarter, with increases in both Diversified Industrial and Aerospace Systems. Source
• Order comparison basis stated: Diversified Industrial order comparisons use 3-month averages and Aerospace Systems comparisons use rolling 12-month averages, at constant currency and excluding divestitures. Source

Margins and costs

• Segment margin rose 20 bps: Segment operating margin was 23.4%, up 20 bps, and adjusted margin 26.7%, up 40 bps. North America, International and Aerospace Systems each reported record adjusted segment operating margin. Source
• Reported margins fell in two segments: Reported segment margin fell 40 bps in North America to 22.6% and 70 bps in International to 22.3%. International business realignment charges were $21 million. Source
• Cost of sales and SG&A rose: Cost of sales was $3,469 million against $3,130 million, and SG&A was $884 million against $785 million. Interest expense was $99 million against $96 million. Source
• Income tax expense rose: Income taxes were $215 million against $33 million a year earlier. Source

“Our focus on being great generators and deployers of cash is underscored by our recent decision to raise our quarterly cash dividend by 11%.”

Jenny Parmentier, Chairman and Chief Executive Officer

Cash, capital and shareholder returns

• Record year-to-date operating cash flow: Year-to-date cash flow from operations was a record $2.6 billion, $2,628 million, or 16.7% of sales, against $2,309 million a year earlier. Source
• Acquisitions and capital spending: Acquisitions used $1,014 million net of cash acquired, against none a year earlier. Capital expenditures were $286 million, against $304 million. Source
• Share repurchases and dividends paid: Payments for common shares were $1,007 million for nine months, against $860 million; the company repurchased $275 million of shares in the quarter. Dividends paid were $683 million. Source
• Dividend track record cited: Cash dividends per common share were $1.80 in the quarter, against $1.63. Management said the annual dividend payout has increased for 70 consecutive fiscal years. Source
• Debt mix and cash balance: Debt payable within one year rose to $2,813 million from $1,791 million at June 30, 2025; long-term debt fell to $6,769 million from $7,494 million. Cash was $476 million. Source

Strategy and portfolio

• Results tied to focused portfolio: Management tied the results to a focused portfolio and to the use of The Win Strategy tools in serving customers. Source
• Currency and acquisitions in quarter sales: Of the 10.6% reported sales growth, currency added 2.6 points and acquisitions 1.5 points, leaving organic growth of 6.5%. Source
• Nine-month growth and drivers: Nine-month reported sales growth was 7.8%, with organic growth of 6.0%; currency added 1.7 points, acquisitions 1.1 points, and divestitures reduced growth by 1.0 points. Source

Figures management reported

Other quarters

• Q4 FY2026 earnings call
• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.