Parker-Hannifin Revenue Drops on Lower Orders, Stronger Dollar

By Lisa Beilfuss 

Parker-Hannifin Corp. said its profit in its latest quarter rose 18%, though its revenue declined thanks to lower orders and the stronger dollar.

Shares dropped 3.5% to $120.50 during premarket trading and are down 4% this year through Monday's close.

Parker trimmed its profit outlook for the year ending in June to $7.55 to $7.75 a share, down from its earlier projection of $7.90 to $8.30 a share.

Earlier this year, the Cleveland-based industrial conglomerate replaced its retiring chief executive with Thomas Williams, who had been chief operating officer since 2006.

"Our third quarter order rates and unfavorable currency trends have had a significant influence on our outlook for the fourth quarter," he said, referring to a 4% decline in orders.

The century-old company, which supplies parts to Caterpillar Inc. and Boeing Co., said it experienced significant currency headwinds during the quarter. In its international business, where a stronger U.S. dollar makes its products more expensive, sales fell 15% to $1.15 billion. Meanwhile, North American sales in the company's diversified industrial unit fell 1% to $1.44 billion.

Parker's aerospace systems segment, however, reported a 5% sales increase to $572.4 million.

In all, Parker posted a profit of $285.5 million, or $2.02 a share, up from $242.5 million, or $1.60 a share, a year earlier. Excluding restructuring costs, earnings climbed $2.06 a share from $1.88.

Revenue declined about 6% to $3.16 billion, mostly due to changes in foreign-currency rates.

Analysts were looking for $1.99 a share in profit on $3.3 billion in revenue.

Write to Lisa Beilfuss at [e-mail]

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