Parker-Hannifin (PH) Q2 2026 earnings summary

Executive summary

• Achieved record quarterly sales of $5.2 billion, up 9% year-over-year, with 6.6% organic growth and strong performance in both Diversified Industrial and Aerospace Systems segments.

• Adjusted EPS reached a record $7.65, up 17% year-over-year; reported EPS was $6.60, down due to a prior-year one-time divestiture gain.

• Announced a definitive agreement to acquire Filtration Group Corporation for $9.25 billion, expected to close in 6-12 months, expanding presence in filtration, aftermarket, and life sciences.

• Backlog increased to a record $11.7 billion, with positive order rates across all businesses.

• Gross profit margin improved to 37.3% from 36.3% year-over-year, reflecting favorable product mix and cost containment.

Financial highlights

• Sales up 9% year-over-year; organic growth nearly 7%, with favorable currency and acquisition impacts.

• Adjusted EBITDA margin reached 27.7%, up 90 basis points; adjusted segment operating margin was 27.1%, up 150 basis points.

• Adjusted net income for Q2 was $980 million, up from $853 million in the prior year; net income margin was 16.3% for the quarter.

• Cash flow from operations for the six months was $1.64 billion, with a margin of 16.0%.

• Free cash flow margin was 14.2% for the first half; capital expenditures were $183 million.

Outlook and guidance

• Full-year organic sales growth guidance raised to 4%-6% (midpoint 5%), with reported sales growth of 5.5%-7.5%.

• Adjusted segment operating margin guidance increased to 27.0%-27.4% for the year.

• Full-year adjusted EPS guidance raised to $30.40-$31.00, up 12.3% year-over-year.

• Free cash flow guidance increased to $3.2-$3.6 billion, with conversion above 100%.

• Q3 guidance: sales ~$5.4 billion (+8.5%), organic growth 5%, segment margin 27%, adjusted EPS $7.75.