Parker-Hannifin Corp.: Q1 FY2027 earnings call

What management said about Q1 FY2027, from the documents filed with the SEC on 5 November 2026: press release. Guidance figures: 5 raised, 2 lowered, 2 new, 1 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Record sales and adjusted EPS: Sales rose 18% to $6.0 billion, with organic growth of 11.5% and acquisitions adding 7%. Adjusted EPS rose 23% to $8.90; GAAP diluted EPS rose 10% to $6.92. Source
• North America sales up 19.6%: Sales rose 19.6% to $2,445 million, with 9.4% organic growth. GAAP segment margin was 23.0%, down 180 bps; adjusted margin was 27.6%, up 60 bps. Source
• Aerospace sales and margin up: Sales rose 13.8% to $1,867 million, with 13.9% organic growth. GAAP margin was 26.6%, up 160 bps; adjusted margin was 30.7%, up 70 bps. Source
• Segment margin up on adjusted basis: Segment operating margin was 24.4%, up 20 bps; adjusted margin was 28.6%, up 120 bps. Adjusted results exclude amortization, realignment and integration charges. Source
• Record backlog across businesses: Backlog reached $13.7 billion, and rolling 12-month order rates were double digit across all businesses. Source
• Goodwill and total assets up: Goodwill rose to $16.2 billion and total assets to $41.9 billion, from $11.1 billion and $30.9 billion at June 30, 2026. Source
• Borrowings rose sharply: Proceeds from borrowings were $12,478 million, and payments for borrowings were $5,257 million. Long-term debt was $12,734 million, against $6,766 million at June 30, 2026. Source

“Parker team members delivered an exceptional quarter of record performance and an impressive start to our fiscal year,”

Jenny Parmentier, Chairman and Chief Executive Officer

Guidance

What changed from last quarter

• Guidance raised: Reported sales growth range raised to 16.0% to 19.0%, from 5.5% to 8.5%, with the range now including Filtration Group Corporation. Source
• Guidance raised: Organic sales growth range raised to 7.5% to 10.5%, from 5.5% to 8.5%. Source
• Guidance raised: Adjusted segment operating margin range raised to 27.7% to 28.1%, from 27.5% to 27.9%. Source
• Guidance raised: Adjusted diluted EPS range raised to $36.45 to $37.25, from $34.25 to $35.25. Source
• Guidance lowered: GAAP segment operating margin range lowered to 23.6% to 24.0%, from 24.5% to 24.9%. Source
• Guidance lowered: GAAP diluted EPS range lowered to $29.65 to $30.45, from $30.00 to $31.00. Source
• New guidance: Cash flow from operations and capital expenditure figures appear in this release; the prior release gave none. Source
• New: Filtration Group Corporation acquisition completed in the quarter and included in updated guidance. Source
• New: Adjusted net income, adjusted EPS and organic sales growth now include an adjustment for IEEPA tariff returns to customers. Source
• New: All order comparisons now use rolling 12-month average computations, as the prior release said would begin in fiscal 2027. Source

Results and growth drivers

• Record sales and adjusted EPS: Sales rose 18% to $6.0 billion, with organic growth of 11.5% and acquisitions adding 7%. Adjusted EPS rose 23% to $8.90; GAAP diluted EPS rose 10% to $6.92. Source
• Net income up on adjusted basis: Net income rose 9% to $0.9 billion. Adjusted net income rose 23% to $1.1 billion, per the company's non-GAAP reconciliation. Source
• Diluted share count eased: Diluted weighted average shares were 127.8 million against 128.4 million a year earlier. Source

Segments and regions

• North America sales up 19.6%: Sales rose 19.6% to $2,445 million, with 9.4% organic growth. GAAP segment margin was 23.0%, down 180 bps; adjusted margin was 27.6%, up 60 bps. Source
• International margin up 270 bps: Sales rose 22.0% to $1,707 million, with organic growth of 23% in APAC, 4% in EMEA and (1%) in Latin America. Adjusted segment margin was 27.7%. Source
• Aerospace sales and margin up: Sales rose 13.8% to $1,867 million, with 13.9% organic growth. GAAP margin was 26.6%, up 160 bps; adjusted margin was 30.7%, up 70 bps. Source

“We experienced increased demand across all market verticals, resulting in double-digit organic sales growth and record backlog levels.”

Jenny Parmentier, Chairman and Chief Executive Officer

Margins and costs

• Segment margin up on adjusted basis: Segment operating margin was 24.4%, up 20 bps; adjusted margin was 28.6%, up 120 bps. Adjusted results exclude amortization, realignment and integration charges. Source
• Amortization of intangibles rose: Amortization of acquired intangibles was $189 million against $140 million, or $1.48 per diluted share against $1.09. It is excluded from adjusted results. Source
• Corporate overhead rose: Corporate general and administrative expenses were $58 million against $49 million a year earlier. Source

Demand and the order book

• Record backlog across businesses: Backlog reached $13.7 billion, and rolling 12-month order rates were double digit across all businesses. Source
• Parker and North America orders: Rolling 12-month order rates: Parker +13% (prior quarter +12%); North America +11% (prior quarter +9%). Source
• International and Aerospace orders: Rolling 12-month order rates: International +14% (prior quarter +10%); Aerospace Systems +14% (prior quarter +18%). Source

“We are pleased to have completed the acquisition of Filtration Group Corporation, significantly expanding our filtration offering and aftermarket business and are excited to welcome these talented team members to Parker.”

Jenny Parmentier, Chairman and Chief Executive Officer

Adjusted measures and tariffs

• Tariff refunds excluded from adjusted: The Supreme Court ruled in February 2026 that IEEPA tariffs were unauthorized. Net tariff refunds of $21 million, or $0.17 per diluted share, are excluded from adjusted results. Source
• Acquisition costs excluded from adjusted: Acquisition-related expenses were $78 million, or $0.61 per diluted share, and are excluded from adjusted EPS. Source
• Realignment and integration charges: Business realignment charges were $17 million ($0.13 per share) and integration costs to achieve were $23 million ($0.18 per share); both are excluded from adjusted EPS. Source

Acquisitions and balance sheet

• Goodwill and total assets up: Goodwill rose to $16.2 billion and total assets to $41.9 billion, from $11.1 billion and $30.9 billion at June 30, 2026. Source
• Current debt rose sharply: Notes payable and current portion of long-term debt were $4,744 million, against $1,754 million at June 30, 2026. Source
• Inventory build used cash: Inventories used $232 million of cash in the quarter, against $163 million a year earlier. Source

Cash, debt and capital

• Operating cash flow was $752 million: Net cash from operations was $752 million, against $782 million. Acquisitions, net of cash acquired, used $9,102 million, against $1,013 million. Source
• Borrowings rose sharply: Proceeds from borrowings were $12,478 million, and payments for borrowings were $5,257 million. Long-term debt was $12,734 million, against $6,766 million at June 30, 2026. Source
• Share repurchases fell sharply: Payments for common shares were $118 million, against $522 million a year earlier. Dividends paid were $252 million, against $228 million. Source
• Cash dividend per share up: Cash dividends per common share were $2.00, against $1.80 a year earlier. Source

Coming up, as management said on 5 November 2026

• CIRCOR acquisition pending: The prior release said guidance excluded the pending acquisitions of Filtration Group and CIRCOR's Commercial and Defense Aerospace Business. The current release does not say the CIRCOR deal has closed.

Figures management reported

Risks management discussed

• Regulatory: IEEPA tariff-related returns to customers reduced first-quarter net sales by $27 million, partly offset by $6 million received from the U.S. government. Source
• Operational: The reported North America segment margin of 23.0% includes expenses related to the Filtration Group acquisition. Source

Earlier plans management reported on

• Met: Management said the company surpassed its previous 27% adjusted segment operating margin target this year.
• Not stated: Management said it remains committed to these fiscal 2031 targets. The current release does not restate progress against them.
• Not stated: The prior release forecast fiscal 2027 as a record year. The current release does not restate that forecast.

Other quarters

• Q4 FY2026 earnings call
• Q3 FY2026 earnings call
• Q2 FY2026 earnings call
• Q1 FY2026 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.