PH earnings analysis
What we found in PH's 10-K: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Parker delivered strong fiscal 2026 execution, with sales up 8.3%, organic growth of 6.6%, higher gross margin, diluted EPS of $28.48 and record $12.8 billion backlog. Aerospace Systems was the principal growth and margin driver, while Diversified Industrial also improved through pricing, volume and acquisitions. However, the completed $9.25 billion FGC acquisition, $7.75 billion of post-year-end borrowing and pending $2.55 billion CIRCOR transaction materially raise leverage and integration risk, supporting a neutral rather than bullish assessment.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Organic growth reaccelerated
- Net sales increased 8.3% to $21,499 million in 2026 from $19,850 million in 2025, including 6.6% organic sales growth. Revenue was $19,930 million in 2024, marking a clear reacceleration after the 2025 decline.
- Margins and EPS continued higher
- Gross margin expanded to 37.7% from 36.9%, while operating income before interest and other expense increased to $5,068 million from $4,347 million, implying a 23.6% operating margin. Diluted EPS rose to $28.48 from $27.12 in 2025 and $21.84 in 2024.
- Aerospace led growth
- Aerospace Systems was the fastest-growing segment: sales increased 14.2% reported and 13.4% organically, while segment operating margin expanded 270 basis points to 26.0%. Growth was led by higher volume, especially in commercial OEM and aftermarket markets.
- Record backlog supports visibility
- Backlog reached $12.8 billion at June 30, 2026, up from segment backlogs of $4,332 million in Diversified Industrial and $8,498 million in Aerospace Systems. Approximately 70% of total backlog is expected to convert to revenue within the next 12 months.
- Cash generation strengthened
- Operating cash flow increased to $4,364 million from $3,776 million in 2025 and $3,384 million in 2024, despite higher working-capital requirements. Capital expenditures were $459 million, with management targeting 2.5% of sales in fiscal 2027 and 2.0% over the long term.
- Scale-and-technology strategy expanded
- Management’s Win Strategy 3.0 emphasizes customer experience, engineered innovation, lean productivity, local-for-local manufacturing and strategic acquisitions. The company completed the $1.0 billion Curtis acquisition and completed the $9.25 billion Filtration Group acquisition on August 13, 2026; FGC adds filtration exposure in life sciences, HVAC and industrial markets.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- FGC financing materially increases leverage
- Subsequent to June 30, 2026, Parker borrowed the full $7.75 billion available under acquisition-related credit facilities to fund the $9.25 billion FGC purchase. Management intends to repay part with cash and refinance the remainder with long-term debt, increasing refinancing and interest-rate risk; the filing also identifies a debt-to-debt-shareholders’ equity covenant capped at 0.65 to 1.0 versus 0.36 to 1.0 at year-end.
- Acquisition execution remains substantial
- Parker has a pending $2.55 billion cash acquisition of CIRCOR Aerospace, expected to close in the second half of calendar 2026 and subject to regulatory approvals. The company expects approximately $90 million of fiscal 2027 realignment charges and $25 million of acquisition integration charges, while warning that integration may involve delays, unknown liabilities and unforeseen expenses.
- Tariff and international exposure persists
- Non-U.S. selling locations accounted for approximately 36% of net sales in each of 2026, 2025 and 2024. The company recorded an $84 million reduction to cost of sales from IEEPA tariff refunds in the fourth quarter, but said additional refund amounts and timing remain uncertain and warned that trade barriers involving China or North America could reduce sales, profitability or cash flow.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $28.48
- Gross margin
- 37.7%
- Operating margin
- 23.6%
- Segment
- Diversified Industrial: $14,438 million revenue in 2026 versus $13,665 million in 2025 and $14,458 million in 2024; segment operating margin was 23.8%.
- Segment
- Aerospace Systems: $7,061 million revenue in 2026 versus $6,185 million in 2025 and $5,472 million in 2024; segment operating margin was 26.0%.
What they said about what is next.
The 10-K provides no annual revenue or EPS guidance. Quantitative MD&A outlook includes a fiscal 2027 capital-expenditure target of 2.5% of sales, approximately $90 million of business realignment charges and approximately $25 million of acquisition integration charges.
The filing reads about the same as the one before it.
What came before.
- 10-Q · May 1, 2026
- Parker Hannifin's Q3 2026 results showed a robust revenue of $5.486 billion, an 11% increase year-over-year. EPS came in at $8.17, above estimates and reflecting strong underlying growth and margin pressures in specific…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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