Earnings Analysis November 5, 2026

Parker-Hannifin Corp ($PH) Q1 FY2027 Earnings Analysis: Revenue and EPS Both Beat Estimates, Annual Guidance Raised

Earnings Report

Revenue: $5.992 billion (Year-over-year +17.9%, expected $5.77 billion) ✅ Beat

EPS (Earnings Per Share): Adjusted $8.90 (vs. $7.22 year-over-year, +23%), GAAP $6.92, expected $8.17 ✅ Beat

Guidance: Upward revision · Revenue growth 16.0~19.0%, organic growth 7.5~10.5%, adjusted EPS $36.45~37.25, adjusted segment operating margin 27.7~28.1%, free cash flow $3.5 billion~$4.0 billion

Stock Reaction: After-hours +7.33% ($976.92, as of 11-05 21:41 KST)

Highlights

11.5% Organic Revenue Growth: Organic revenue, excluding acquisition effects, grew into the double digits

$13.7 billion Backlog: All three business segments recorded double-digit backlog growth

28.6% Adjusted Segment Operating Margin: A record high, up 1.2 percentage points from 27.4% a year ago

North America, International, and Aerospace all set quarterly revenue records. Among international businesses, the Asia-Pacific region had the highest organic growth rate at 23.4%, and Aerospace saw double-digit growth driven by both new equipment and replacement demand. The company raised its annual outlook based on this momentum and the completion of the acquisition.

Lowlights

24.4% GAAP Segment Operating Margin: A 4.2 percentage point gap from the adjusted 28.6%

$146 million Interest Expense: Increased 45% from $101 million a year ago

$752 million Cash Flow from Operating Activities: Decreased from $782 million a year ago

As the company paid $9.102 billion for the filtration business acquisition, total debt increased from $8.52 billion at the end of June to $17.478 billion. Inventory also increased from $3.166 billion at the end of June to $3.64 billion, increasing the working capital burden. Acquisition costs and inventory increases are factors that lowered the quality of earnings this quarter.

What the Company Said

CEO Jenny Parmentier explained that the backlog reached an all-time high as demand increased across all market sectors. The company raised its annual outlook reflecting this momentum and the completion of the filtration business acquisition, citing increased win rates as the basis.

Market Reaction and Future Key Points

The announcement was released before the US market opened. After the company raised its annual guidance, the after-hours stock price surged.

A key point to monitor is whether organic revenue growth remains in the double digits during the second quarter (October–December).

The key factor is how much the acquisition of the filtration business contributes to actual revenue and margins.

It is necessary to observe how much the increased debt and interest expenses weigh on quarterly net income.

Earnings Call Summary

Once the earnings call concludes and the company's transcript is released, the key takeaways from the call will be added here. We will select and summarize only the most important details, such as how management explained the results and outlook, and what questions analysts asked.