PH - Parker Hannifin - Nine of the 12 covering analysts raised their estimates over the past month

Parker Hannifin is benefiting from the strength of emerging markets. International growth led to the company beating estimates and raising its forecast. Over the past month, this year's earnings estimates have jumped 18 cents to $5.46 per share. Nine of the 12 covering analysts raised their estimates during this time period.

Full Analysis

Parker Hannifin Corporation (PH) manufactures fluid power systems, electromechanical controls, and related components worldwide. Its Industrial segment offers connectors; hydraulic components and systems for the builders and users of industrial and mobile machinery and equipment; pneumatic and electromechanical components and systems.

The company's Aerospace segment provides hydraulic, fuel, and pneumatic systems and components used for commercial and military airframe and engine programs. It also manufactures a range of fluid conveyance systems, fluid metering, delivery and atomization devices, and inert nitrogen generating systems.

Strong Earnings

On April 22, the company said that its fiscal third-quarter profit rose 22%, on gains from acquisitions and core business growth led by international sales of its industrial products. For the three months ending March 31, the company earned $255.4 million, or $1.49 per share, compared with $209.3 million, or $1.19 per share, in the year-ago period. Revenue rose 14% to $3.18 billion, from $2.78 billion in the prior-year period. Analysts, on average, were expecting a profit of $1.34 per share.

Guidance Boost

PH also raised its fiscal 2008 profit forecast on growing orders across several regions and strength in its aerospace segment. For the fiscal year ending in June, the company expects to earn $5.40 per share to $5.60 per share, compared with a previous prediction of $5.15 per share to $5.40 per share. Analysts, on average, expected profit of $5.28 per share for the fiscal year, with estimates ranging from $5.15 per share to $5.39 per share. The company said orders are growing in Europe, Asia, Latin America and North America, and it is continuing to see growth in its aerospace unit.

"We are clearly headed to another record year for Parker, which will be the fifth record year in a row. The company continues to perform very well, showing strength during an economic cycle that has resulted in a challenging economic environment, particularly in North America. This is clearly the result of the dedication of our nearly 60,000 empowered employees who continue to stay focused on the Win Strategy, which is the clear roadmap that defines the goals, sets the strategies for achieving them, and identifies how progress will be measured," said Chairman, CEO and President Don Washkewicz.

Over the past month, this year's earnings estimates have jumped 18 cents to $5.46 per share. Nine of the 12 covering analysts raised their estimates during this time period. Including its recent report, the company has posted an average surprise of 6.7% over the past year. The stock is attractively valued with a PEG ratio of 0.8.

Content Courtesy: Zacks Investment Research

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