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Parker-Hannifin Corp.: Q4 FY2026 earnings call

What management said about Q4 FY2026, from the documents filed with the SEC on 6 August 2026: press release. Guidance figures: 1 raised, 4 new, 3 kept. The quarter’s numbers.

Key takeaways

  • Record sales and organic growth: Fourth-quarter sales rose 9.8% to a record $5.8 billion, with organic sales up 8.0%. Full-year sales were a record $21.5 billion, up 8.3%, with organic growth of 6.6%. Source
  • Fourth-quarter EPS and adjusted EPS: Diluted EPS was $8.54, up 19% from $7.15 a year earlier. Adjusted EPS was a record $9.27, up 21%. Source
  • Aerospace Systems record growth: Aerospace Systems sales rose 13.4% to $1,900 million, with organic growth of 13.3%. Adjusted segment margin was 29.8%, up 80 bps. Source
  • Tariff refund cut cost of sales: Cost of sales was reduced by $84 million in the fourth quarter for IEEPA tariff refunds. Adjusted results exclude this reduction, which is shown as a discrete, non-recurring item. Source
  • Record backlog in every segment: Total backlog reached a record, with increases in all segments. Aerospace Systems backlog also reached a record. Source
  • Record operating cash flow: Full-year cash from operations was $4,364 million, a record and 20.3% of sales, against $3,776 million a year earlier. Source
  • Margin target raised to 30%: Fiscal 2031 adjusted segment operating margin target raised by 300 basis points to 30%, after the previous 27% target was surpassed this year. Source
  • Sales growth guided 5.5% to 8.5%: Reported and organic sales growth are each guided at 5.5% to 8.5% for fiscal 2027. Acquisitions add 0.5% and currency subtracts 0.5%, per the company. Source

“We are forecasting fiscal 2027 to be a record year for Parker supported by a broadening recovery in industrial markets and positive organic growth across all market verticals.”

Jenny Parmentier, Chairman and Chief Executive Officer

Guidance

AreaPeriodFigureAgainst last quarter
Reported sales growth SourceFiscal 20275.5% to 8.5%New
Organic sales growth SourceFiscal 20275.5% to 8.5%New
Segment operating margin SourceFiscal 202724.5% to 24.9%; 27.5% to 27.9% adjustedNew
Diluted EPS SourceFiscal 2027$30.00 to $31.00; $34.25 to $35.25 adjustedNew
Adjusted segment operating margin target SourceFiscal 203130%Raised from 27%
Organic sales growth target SourceFiscal 20314% to 6%Kept
Free cash flow margin target SourceFiscal 203117%Kept
Adjusted EPS growth target SourceFiscal 2031greater than 10%Kept

What changed from last quarter

  • New guidance: Fiscal 2027 guidance issued; it excludes the pending Filtration Group and CIRCOR acquisitions. Source
  • Guidance raised: Fiscal 2031 adjusted segment operating margin target raised from 27% to 30%. Source
  • New: All order rate comparisons move to a 12-month rolling calculation from fiscal 2027, replacing the 3-month average for Diversified Industrial. Source
  • New: Agreement to acquire CIRCOR's Commercial and Defense Aerospace Business is new; the previous release mentioned only Filtration Group. Source

Quarter and full-year results

  • Record sales and organic growth: Fourth-quarter sales rose 9.8% to a record $5.8 billion, with organic sales up 8.0%. Full-year sales were a record $21.5 billion, up 8.3%, with organic growth of 6.6%. Source
  • Fourth-quarter EPS and adjusted EPS: Diluted EPS was $8.54, up 19% from $7.15 a year earlier. Adjusted EPS was a record $9.27, up 21%. Source
  • Full-year EPS and adjusted EPS: Full-year diluted EPS was $28.48, up 5%. Adjusted EPS was a record $32.31, up 18%; adjusted figures exclude items including amortization and the tariff refund. Source
  • Fourth-quarter net income rose: Net income was $1.1 billion, up 18%, or $1.2 billion adjusted, up 20%, in the fourth quarter. Source

Segments and regions

  • North America sales growth: Diversified Industrial North America sales rose 7.0% to $2,221 million, with organic growth of 4.9%. Adjusted segment margin was 27.4%, up 70 bps. Source
  • International growth led by Asia: International sales rose 9.5% to $1,634 million, with organic growth of 6.5%: Asia Pacific 16%, EMEA 1%, Latin America (3%). Adjusted margin was 26.8%, up 210 bps. Source
  • Aerospace Systems record growth: Aerospace Systems sales rose 13.4% to $1,900 million, with organic growth of 13.3%. Adjusted segment margin was 29.8%, up 80 bps. Source

“We had our safest year ever, continued enhancing our portfolio of interconnected technologies through strategic acquisitions, and demonstrated operational excellence to deliver record results.”

Jenny Parmentier, Chairman and Chief Executive Officer

Costs, margins and tariff refunds

  • Tariff refund cut cost of sales: Cost of sales was reduced by $84 million in the fourth quarter for IEEPA tariff refunds. Adjusted results exclude this reduction, which is shown as a discrete, non-recurring item. Source
  • Fourth-quarter segment margin rose: Segment operating margin was 26.5% reported and 28.0% adjusted, up 260 and 110 bps. The reported figure includes the tariff refund. Source
  • Full-year margin expansion: Full-year segment operating margin was 24.5%, up 150 bps; adjusted margin was 27.3%, up 120 bps. Management says the previous 27% margin target was surpassed. Source

Demand, orders and backlog

  • Record backlog in every segment: Total backlog reached a record, with increases in all segments. Aerospace Systems backlog also reached a record. Source
  • Fourth-quarter orders up in all groups: Fourth-quarter order rates rose in all three reporting groups: Parker overall, Diversified Industrial North America and International, and Aerospace Systems. Source
  • Rolling-basis order rate lower: On the 12-month rolling basis, Parker's fourth-quarter order rate is 12%, versus 19% on the previously disclosed method. Source

“This method provides a stronger correlation to near-term organic growth rates.”

Jenny Parmentier, Chairman and Chief Executive Officer

Capital, cash and shareholder returns

  • Record operating cash flow: Full-year cash from operations was $4,364 million, a record and 20.3% of sales, against $3,776 million a year earlier. Source
  • Nearly $2 billion returned: Share repurchase payments were $1,262 million, against $1,766 million a year earlier. Dividends paid were $936 million. Source
  • Dividend raised 11%: The annual dividend increased 11%, extending 70 consecutive fiscal years of increases in annual dividends per share paid. Source
  • Acquisition and capex spending: Acquisitions used $1,014 million net of cash acquired. Capital expenditures were $459 million, against $435 million a year earlier. Source
  • Current debt on balance sheet: Notes payable and long-term debt due within one year were $1,754 million at June 30, 2026, against $1,791 million a year earlier. Source

Portfolio transformation and targets

  • More aerospace, longer-cycle mix: Management describes the portfolio as more concentrated in aerospace, longer-cycle and more resilient end markets, and cites this for the order comparison change. Source
  • Margin target raised to 30%: Fiscal 2031 adjusted segment operating margin target raised by 300 basis points to 30%, after the previous 27% target was surpassed this year. Source
  • CIRCOR business agreed: Curtis Instruments acquisition completed. Agreement announced to buy CIRCOR's Commercial and Defense Aerospace Business; Filtration Group also pending. Source

Fiscal 2027 guidance

  • Sales growth guided 5.5% to 8.5%: Reported and organic sales growth are each guided at 5.5% to 8.5% for fiscal 2027. Acquisitions add 0.5% and currency subtracts 0.5%, per the company. Source
  • Margin and EPS for fiscal 2027: Segment margin 24.5% to 24.9%, or 27.5% to 27.9% adjusted. Diluted EPS $30.00 to $31.00, or $34.25 to $35.25 adjusted. Source
  • Guidance excludes pending deals: Fiscal 2027 guidance excludes the pending Filtration Group and CIRCOR acquisitions, the company says. Source

Coming up, as management said on 6 August 2026

  • Pending deals still to close: Filtration Group and CIRCOR's aerospace business remain pending; the release gives no closing dates. Source
  • Rolling order comparisons begin: Order-rate comparisons switch to a 12-month rolling basis from fiscal 2027. Source

Figures management reported

FigureReported
Backlog, total Source$12.8 billion, record
Backlog, Aerospace Systems Source$8.5 billion, record
Order rate, Parker, Q4 FY26 Source+19%
Order rate, Diversified Industrial North America Source+16%
Order rate, Diversified Industrial International Source+24%
Order rate, Aerospace Systems Source+18%
Order rate, Parker, rolling 12-month, Q4 FY26 Source12%

Risks management discussed

  • Financial: Further IEEPA tariff refunds may be received, but none is recorded as a receivable because amount and timing are uncertain. Source
  • Regulatory: The Supreme Court ruling that IEEPA tariffs were unauthorized underlies the refunds recognized this quarter. Source

Earlier plans management reported on

  • Not stated: Management says it remains committed to these fiscal 2031 targets. This release does not report progress against them. Source
  • Ahead: Management says the 27% target was surpassed this year, before the new 30% fiscal 2031 target was set. Source
  • Not stated: The April release expected mid-teens adjusted EPS growth for fiscal 2026. This release reports the full-year adjusted EPS result.

Other quarters

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.