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.
Industry:MACH-GENL INDL Sector: Industrial Products Fiscal Year End:June Last Reported Quarter:12/31/11 Next EPS Date:04/25/12
Capital Structure Solvency and Cash Flow
Balance Sheet and Cash Flow
Cash flow from operations was $122.9 million (4.3% of sales) compared with $260.1 million (11.6% of sales) in 1Q10. The current quarter cash flow from operations included a $200 million discretionary contribution to the Company's pension plan, excluding which cash flow from operations as a percent of sales was 11.4%.
At the end of 1Q11, cash and cash equivalents was $923.8 million with long-term debt of $1.7 billion and shareowner’s equity of $4.9 billion compared with $575.5 million, $1.4 billion and $4.4 billion at the end of 4Q10.
Parker sees the potential for acquisition activity to accelerate over the quarter or two, as management recently gave its division managers approval to restart their acquisition processes. The analysts expect PH to use its higher debt capacity and rising cash levels to resume M&A and/or return to share buybacks after a two-year hiatus.
Dividend
On October 28, 2010, PH announced that its Board of Directors increased the Company's regular quarterly cash dividend to $0.29 per share of common stock and declared a dividend payable on December 3, 2010 to shareholders of record as of November 10, 2010. This represents a 7% increase over the previous quarterly dividend of $0.27 per common share and is the Company's 242nd consecutive quarterly dividend, resulting in a total distribution to shareholders of approximately $47 million.
Last edited Tue Nov 16, 2010 06:17 AM by BipashaChowdhury (Zacks Investment Research)
Governance Social Responsibility and Employee Relations
Last edited Tue Nov 16, 2010 06:17 AM by BipashaChowdhury (Zacks Investment Research)
• Weakness in the auto market continues to adversely affect sales and margins in the Climate & Industrial Control segment.
• Global macroeconomic outlook is increasingly dependent on sustained growth in the emerging economies (e.g., China, India), where political and/or monetary event risk is likely higher.
• Parker derives its revenue globally. As a result, any adverse change in foreign exchange rates or the market environment could negatively affect its financial results.
• Increase in interest rates could threaten further economic expansion and adversely affect PH’s end markets.
• Offsetting rising input costs (particularly steel) with price increases could be difficult in a soft demand environment.
Last edited Tue Nov 16, 2010 06:18 AM by BipashaChowdhury (Zacks Investment Research)
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