Fiscal 2026 Third Quarter Highlights:
Sales increased 11% to a record $5.5 billion; organic sales increased 6.5%
Segment operating margin was 23.4%, an increase of 20 bps, or 26.7% adjusted, an increase of 40 bps
Net income was $0.9 billion, a decrease of 6% compared with the third quarter of fiscal 2025 which included a one-time discrete tax benefit of $180 million
Adjusted net income increased 16% to $1.0 billion
EPS were $7.06, a decrease of 4% compared with the third quarter of fiscal 2025 which included a one-time discrete tax benefit of $1.37
Adjusted EPS increased 18% to a record $8.17
Year-to-date cash flow from operations was a record $2.6 billion, or 16.7% of sales
Repurchased $275 million of shares in the quarter
Company increases outlook for sales and EPS
"Our global team delivered another quarter of record performance," said Jenny Parmentier, Chairman and Chief Executive Officer. "In the third quarter, we reported record sales, adjusted segment operating income and margin, adjusted earnings per share and year-to-date operating cash flow. These results reflect the strength of our focused portfolio and our ability to use the tools in The Win Strategy™ to best serve the needs of our customers. With strong orders and record backlog, we are raising our outlook and now expect mid-teens adjusted EPS growth for the year. Our focus on being great generators and deployers of cash is underscored by our recent decision to raise our quarterly cash dividend by 11%. This extends our track record of increasing our annual dividend payout, which now stands at 70 consecutive fiscal years."
This news release contains non-GAAP financial measures. Reconciliations of adjusted numbers and certain non-GAAP financial measures are included in the financial tables of this press release.
Outlook
Guidance for the fiscal year ending June 30, 2026 has been updated. The company expects:
Reported sales growth of 7%.
Organic sales growth of 5.5%; acquisitions of 1%, divestitures of (1%), and currency of 1.5%.
Segment operating margin of 23.9%, or 27.2% on an adjusted basis.
EPS of $27.10, or $31.20 on an adjusted basis.
Segment Results
Diversified Industrial Segment
North America Businesses
$ in mm
FY26 Q3
FY25 Q3
Change
OrganicGrowth
Sales
$
2,141
$
2,031
5.4
%
2.8
%
Segment Operating Income
$
484
$
467
3.6
%
Segment Operating Margin
22.6
%
23.0
%
-40 bps
Adjusted Segment Operating Income
$
541
$
513
5.5
%
Adjusted Segment Operating Margin
25.3
%
25.2
%
10 bps
Record adjusted segment operating margin
Organic growth of 2.8% driven by in-plant & industrial, off-highway and energy
Order rates remain strong at 7%
International Businesses
$ in mm
FY26 Q3
FY25 Q3
Change
OrganicGrowth
Sales
$
1,531
$
1,358
12.7
%
3.3
%
Segment Operating Income
$
341
$
312
9.3
%
Segment Operating Margin
22.3
%
23.0
%
-70 bps
Adjusted Segment Operating Income
$
387
$
340
13.8
%
Adjusted Segment Operating Margin
25.3
%
25.1
%
20 bps
Record sales led by Asia with 9.6% organic growth
Record adjusted segment operating margin
Order rates at 6% driven by long-cycle electronics and defense bookings
Aerospace Systems Segment
$ in mm
FY26 Q3
FY25 Q3
Change
OrganicGrowth
Sales
$
1,814
$
1,571
15.5
%
14.2
%
Segment Operating Income
$
457
$
373
22.5
%
Segment Operating Margin
25.2
%
23.7
%
150 bps
Adjusted Segment Operating Income
$
536
$
451
18.8
%
Adjusted Segment Operating Margin
29.5
%
28.7
%
80 bps
Record sales on 22% commercial OEM growth and 14% aftermarket growth
Record adjusted segment operating margin
Order rates at 14%, with double-digit growth across both OEM and aftermarket
Order Rates
FY26 Q3
Parker
+9
%
Diversified Industrial Segment - North America Businesses
+7
%
Diversified Industrial Segment - International Businesses
+6
%
Aerospace Systems Segment
+14
%
Order rates remain strong at 9% with all reported businesses generating positive growth
Backlog increased to a record $12.5 billion, with increases in both Diversified Industrial and Aerospace Systems Segments
About Parker HannifinParker Hannifin is a Fortune 250 global leader in motion and control technologies. For more than a century the company has been enabling engineering breakthroughs that lead to a better tomorrow. Learn more at www.parker.com or
Contacts:
Media:
Financial Analysts:
Aidan Gormley
Jeff Miller
216-896-3258
216-896-2708
[email protected]
[email protected]
Notice of Webcast Parker Hannifin's conference call and slide presentation to discuss its fiscal 2026 third quarter results are available to all interested parties via live webcast today at 11:00 a.m. ET, at investors.parker.com. A replay of the webcast will be available on the site approximately one hour after the completion of the call and will remain available for one year. To register for e-mail notification of future events please visit investors.parker.com.
Note on Orders The company reported orders for the quarter ending March 31, 2026, compared with the same quarter a year ago. All comparisons are at constant currency exchange rates, with the prior year quarter restated to the current-year rates, and exclude divestitures. Diversified Industrial comparisons are on 3-month average computations and Aerospace Systems comparisons are on rolling 12-month average computations.
Note on Non-GAAP Financial MeasuresThis press release contains references to non-GAAP financial information including (a) adjusted net income; (b) adjusted earnings per share; (c) adjusted segment operating margin for Parker and by segment; (d) adjusted segment operating income for Parker and by segment; and (e) organic sales growth. These measures are presented to allow investors and the company to meaningfully evaluate changes in net income, earnings per share and segment operating margins on a comparable basis from period to period. Although these measures are not measures of performance calculated in accordance with GAAP, we believe that they are useful to an investor in evaluating the results of this quarter versus the prior period. Comparable descriptions of record adjusted results in this release refer only to the period from the first quarter of FY2011 to the periods presented in this release. This period coincides with recast historical financial results provided in association with our FY2014 change in segment reporting. A reconciliation of non-GAAP measures is included in the financial tables of this press release.
Forward-Looking StatementsForward-looking statements contained in this and other written and oral reports are made based on known events and circumstances at the time of release, and as such, are subject in the future to unforeseen uncertainties and risks. Often but not always, these statements may be identified from the use of forward-looking terminology such as "anticipates," "believes," "may," "should," "could," "expects," "targets," "is likely," "will," or the negative of these terms and similar expressions, and may also include statements regarding future performance, orders, earnings projections, events or developments. Parker cautions readers not to place undue reliance on these statements. It is possible that the future performance may differ materially from expectations, including those based on past performance.
Among other factors that may affect future performance are: changes in business relationships with and orders by or from major customers, suppliers or distributors, including delays or cancellations in shipments; disputes regarding contract terms, changes in contract costs and revenue estimates for new development programs; changes in product mix; ability to identify acceptable strategic acquisition targets; uncertainties surrounding timing, successful completion or integration of acquisitions and similar transactions, including the pending acquisition of Filtration Group Corporation and the integration of Curtis Instruments, Inc.; ability to successfully divest businesses planned for divestiture and realize the anticipated benefits of such divestitures; the determination and ability to successfully undertake business realignment activities and the expected costs, including cost savings, thereof; ability to implement successfully business and operating initiatives, including the timing, price and execution of share repurchases and other capital initiatives; availability, cost increases of or other limitations on our access to raw materials, component products and/or commodities if associated costs cannot be recovered in product pricing; ability to manage costs related to insurance and employee retirement and health care benefits; legal and regulatory developments and other government actions, including related to environmental protection, and associated compliance costs; supply chain and labor disruptions, including as a result of tariffs and labor shortages; threats associated with international conflicts, including geopolitical tensions in the Middle East, and cybersecurity risks and risks associated with protecting our intellectual property; uncertainties surrounding the ultimate resolution of outstanding legal proceedings, including the outcome of any appeals; effects on market conditions, including sales and pricing, resulting from global reactions to U.S. trade policies; manufacturing activity, air travel trends, currency exchange rates, difficulties entering new markets and economic conditions such as inflation, deflation, interest rates and credit availability; inability to obtain, or meet conditions imposed for, required governmental and regulatory approvals; changes in the tax laws in the United States and foreign jurisdictions and judicial or regulatory interpretations thereof; and large scale disasters, such as floods, earthquakes, hurricanes, industrial accidents and pandemics. Readers should also consider forward-looking statements in light of risk factors discussed in Parker's Annual Report on Form 10-K for the fiscal year ended June 30, 2025 and other periodic filings made with the SEC.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
Nine Months Ended
(Unaudited)
March 31,
March 31,
(In millions, except per share amounts)
2026
2025
2026
2025
Net sales
$
5,486
$
4,960
$
15,744
$
14,607
Cost of sales
3,469
3,130
9,889
9,250
Selling, general and administrative expenses
884
785
2,594
2,416
Interest expense
99
96
306
310
Other expense (income), net
(85
)
(46
)
(268
)
(405
)
Income before income taxes
1,119
995
3,223
3,036
Income taxes
215
33
666
427
Net income
904
962
2,557
2,609
Less: Noncontrolling interests
,
1
,
1
Net income attributable to common shareholders
$
904
$
961
$
2,557
$
2,608
Earnings per share attributable to common shareholders:
Basic
$
7.16
$
7.48
$
20.24
$
20.28
Diluted
$
7.06
$
7.37
$
19.95
$
19.97
Weighted average shares outstanding:
Basic
126.2
128.4
126.3
128.6
Diluted
128.0
130.3
128.2
130.6
Cash dividends per common share
$
1.80
$
1.63
$
5.40
$
4.89
BUSINESS SEGMENT INFORMATION
Three Months Ended
Nine Months Ended
(Unaudited)
March 31,
March 31,
(Dollars in millions)
2026
2025
2026
2025
Net sales
Diversified Industrial
$
3,672
$
3,389
$
10,583
$
10,098
Aerospace Systems
1,814
1,571
5,161
4,509
Total net sales
$
5,486
$
4,960
$
15,744
$
14,607
Segment operating income
Diversified Industrial
$
825
$
779
$
2,438
$
2,273
Aerospace Systems
457
373
1,311
1,034
Total segment operating income
1,282
1,152
3,749
3,307
Corporate general and administrative expenses
53
44
155
149
Income before interest expense and other expense (income), net
1,229
1,108
3,594
3,158
Interest expense
99
96
306
310
Other expense (income), net
11
17
65
(188
)
Income before income taxes
$
1,119
$
995
$
3,223
$
3,036
SUPPLEMENTAL FINANCIAL INFORMATION AND NON-GAAP RECONCILIATIONS
ADJUSTED SEGMENT OPERATING INCOME AND ORGANIC SALES GROWTH RECONCILIATION
Three Months Ended March 31, 2026
Three Months Ended March 31, 2025
Diversified Industrial Segment
Aerospace Systems Segment
Diversified Industrial Segment
Aerospace Systems Segment
