Parker-Hannifin Gears Up to Post Q3 Earnings: Is a Beat in Store?

Parker-Hannifin Corporation PH is slated to release third-quarter fiscal 2025 (ended March 2025) results on May 1, before market open.

(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

The Zacks Consensus Estimate for revenues is pegged at $5 billion, indicating a decline of 1.5% from the prior-year quarter’s number. The consensus mark for earnings is pinned at $6.73 per share, which has inched up 0.3% in the past 30 days. The figure indicates an increase of 3.4% from the year-ago quarter’s figure.

The company has a stellar earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 5.4%.

Let’s see how things have shaped up for Parker-Hannifin this earnings season.

Factors Likely to Have Shaped PH’s Quarterly Performance

Solid momentum in commercial and military end markets across both OEM and aftermarket channels is expected to have driven the Aerospace Systems segment’s performance. Healthy demand for its products and aftermarket support services in the general aviation market, driven by growth in air transport activities, is likely to have augmented its performance. Also, strength in its defense market, owing to an increase in U.S. and international defense spending volumes, is likely to have been beneficial.

The acquisition of Meggitt expanded its presence in the United Kingdom, positioning it well to provide a broader suite of solutions for aircraft and aero-engine components and systems. The buyout is also expected to augment the Aerospace Systems segment’s results. The Zacks Consensus Estimate for the segment’s quarterly revenues is pegged at $1.56 billion, indicating 10.7% growth from the year-ago number.

Benefits from the Win Strategy, which focuses on innovation, strategic positioning and capital allocation policy, are expected to have aided PH’s margins in the fiscal third quarter. Notably, the Win strategy is the company’s business system that defines goals and initiatives, which enables long-term and sustainable growth.

However, challenging conditions in the off-highway end market are expected to have hurt the Diversified Industrial segment’s performance. Softness across the construction and agricultural sectors is likely to have weighed on both the North America and international businesses of the segment. Weakness in the transportation market, arising from lower demand for automotive cars, is also likely to affect its results.

The consensus estimate for the Diversified Industrial North America segment’s revenues is pinned at $2.05 billion, indicating an 8.2% decline year over year. The consensus mark for the Diversified Industrial International segment’s revenues is pegged at $1.36 billion, indicating a 5.2% decrease year over year.

Parker-Hannifin Corporation Price and EPS Surprise

Parker-Hannifin Corporation price-eps-surprise | Parker-Hannifin Corporation Quote

Earnings Whispers

Our proven model predicts an earnings beat for Parker-Hannifin this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below.

Earnings ESP: Parker-Hannifin has an Earnings ESP of +1.01% as the Most Accurate Estimate is pegged at $6.80 per share, higher than the Zacks Consensus Estimate of $6.73. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: PH presently carries a Zacks Rank of 3.

Other Stocks With the Favorable Combination

Here are three other companies, which according to our model, have the right combination of elements to post an earnings beat this season.

Emerson Electric Co. EMR has an Earnings ESP of +1.96% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is scheduled to release first-quarter 2025 results on May 7. EMR’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 4.3%.

Illinois Tool Works ITW has an Earnings ESP of +0.15% and a Zacks Rank of 3 at present. The company is slated to release first-quarter results on April 30.

ITW’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 3.6%.

Johnson Controls International JCI has an Earnings ESP of +3.91% and a Zacks Rank of 3 at present. The company is slated to release its first-quarter 2025 results on May 7.

JCI delivered an average earnings surprise of 5.1% in the last four quarters, while beating estimates in each of the quarters.

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This article originally published on Zacks Investment Research (zacks.com).

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