CLEVELAND -- Parker Hannifin Corp. reports 2014 third- quarter net income of $242.5 million, or $1.60 per diluted share. This compares with net income of $256.6 million, or $1.68 per diluted share, for the third quarter of 2013.
Sales increased 2% to $3.36 billion compared with the third quarter a year ago. Adjusting for a previously announced joint venture, fiscal 2014 third-quarter sales increased 3%%.
Cash flow from operations for the first nine months of fiscal 2014 was $817.5 million, or 8.4% of sales compared with $718.8 million, or 7.5% of sales in the year before period. Excluding a discretionary contribution to the company's pension plan of $75 million and the impact of restructuring initiatives of $15 million in fiscal 2014, cash flow from operations was 9.4% of sales.
"We are pleased to have delivered strong operating margins in the third quarter, particularly in our Diversified Industrial International businesses," said Don Washkewicz, chairman, CEO and president, in a prepared statement. "Our previously announced restructuring initiatives are proceeding ahead of plan, with $86 million in pretax expenses incurred fiscal year-to-date. In addition, the improved order growth trend is an encouraging sign for the remainder of this fiscal year."
In the company's Diversified Industrial Segment, North American third-quarter sales increased 1.9% to $1.46 billion and operating income was $243 million compared with $224.5 million in the same period a year ago. International third-quarter sales increased 4.4% to $1.36 billion, and operating income was $126.9 million compared with $158.2 million in the same period a year ago.
International operating income in the third quarter adjusted for the impact of restructuring expenses was $186.4 million.
In the Aerospace Systems Segment, third-quarter sales decreased 5.6% to $545.7 million but increased 2% adjusting for the impact of the previously announced joint venture between Parker Aerospace and GE Aviation. Operating income was $64 million compared with $80.1 million in the same period a year ago, largely reflecting an unfavorable product mix.
Parker reported an increase of 7% in orders for the quarter ending March 31 compared with the same quarter a year ago. By segment, orders increased by 6% in Diversified Industrial North America businesses, 5% in the Diversified Industrial International businesses and 16% in the Aerospace Systems segment on a rolling 12-month average basis.
For the fiscal year ending June 30, the company has increased guidance for adjusted earnings per diluted share to the range of $6.40 to $6.60, or $6.50 at the midpoint. Fiscal 2014 adjusted earnings guidance includes increased restructuring expenses that are anticipated to be approximately 55 cents per diluted share, but does not include the gain associated with the previously announced joint venture and asset write downs recorded in the quarter ended Dec. 31, 2013. "We have increased the midpoint of our guidance for fiscal year 2014 to reflect the impact of improved operating margins and positive order trends," Washkewicz noted. "Considering the progress we have made, we expect to close the year strong and be well-positioned going into fiscal year 2015."
Published by The Business Journal, Youngstown, Ohio.
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