Parker-Hannifin (PH) Q4 2024 earnings summary

Executive summary

• Achieved record FY24 sales of $19.9B, up 4.5% reported and 2.3% organic year-over-year, with exceptional aerospace performance and portfolio transformation.

• Adjusted EPS grew 18% year-over-year to $25.44, with record free cash flow of $3.0B and top quartile safety performance.

• Portfolio now features a higher mix of longer cycle, secular, and aftermarket businesses, targeting 85% by FY2029.

• Aerospace segment reached $5.5B in sales, with 17% organic growth and record margins.

• Achieved significant debt reduction and net leverage target of 2.0x.

Financial highlights

• Q4 FY24 sales were $5.19B, up 1.8% year-over-year; organic sales up 3%.

• Adjusted segment operating margin for Q4 reached 25.3%, up 130 bps; adjusted EBITDA margin was 26.3%, up 190 bps.

• FY24 adjusted EPS was $25.44, up from $21.55 in FY23; adjusted net income was $884M in Q4.

• Free cash flow for FY24 was $3.0B, up 15% year-over-year, with 105% conversion.

• Gross debt reduced by ~$3.4B since Meggitt acquisition; $800M paid down in Q4.

Outlook and guidance

• FY25 organic sales growth forecasted at 2%–5%; reported sales growth 1.5%–4.5%.

• Adjusted segment operating margin guidance at 25.4% midpoint; adjusted EPS guidance at $26.65 midpoint.

• Free cash flow expected at $3.15B (15.3% of sales); FY25 free cash flow guidance is $3.0B–$3.3B, with >100% conversion.

• Q1 FY25 guidance: reported sales +1%, organic growth +1.5%, adjusted segment margin 25.2%, adjusted EPS $6.05.

• FY29 targets include adjusted EPS >$35 and free cash flow >$18B (FY25–FY29 cumulative).