Executive Summary
ParkerHannifin reported Q1 FY2025 (quarter ended September 30, 2024) revenue of $4.904 billion, with gross margin of 36.94% and operating margin of 19.52%, delivering an EBITDA of $1.218 billion and net income of $698.4 million. Adjusted for one-time items, the period demonstrates solid profitability despite a modest sequential revenue decline QoQ of 5.45% and a YoY improvement in bottom-line metrics. Net income rose roughly 7.3% year over year, while EPS advanced about 7.1% YoY to $5.43 (diluted $5.34). QoQ, net income declined about 11.0%. Free cash flow generation was robust at $648.7 million for the quarter, supported by a strong operating cash flow of $744.0 million.
Key Performance Indicators
Key Insights
Overview: Q1 FY2025 revenue of $4.904b, gross profit $1.811b, gross margin 36.94%, operating income $0.957b, operating margin 19.52%, EBITDA $1.218b, net income $0.698b, EPS $5.43 (basic), $5.34 (diluted). YoY changes: revenue +1.17%, gross profit +3.05%, operating income +6.93%, net income +7.31%, EPS +7.10%. QoQ changes: revenue -5.45%, gross profit -3.38%, operating income -10.63%, net income -11.03%, EPS -10.98%. Balance sheet: cash $0.371b; total debt $10.189b; net debt $9.818b; cash and eq...
Financial Highlights
Overview: Q1 FY2025 revenue of $4.904b, gross profit $1.811b, gross margin 36.94%, operating income $0.957b, operating margin 19.52%, EBITDA $1.218b, net income $0.698b, EPS $5.43 (basic), $5.34 (diluted). YoY changes: revenue +1.17%, gross profit +3.05%, operating income +6.93%, net income +7.31%, EPS +7.10%. QoQ changes: revenue -5.45%, gross profit -3.38%, operating income -10.63%, net income -11.03%, EPS -10.98%. Balance sheet: cash $0.371b; total debt $10.189b; net debt $9.818b; cash and equivalents to short-term liquidity remains tight with current ratio 0.959 and quick ratio 0.567. Free cash flow $0.649b; capex $0.095b; financing activity net -$0.711b. Leverage: debt/EBITDA approx 8.0x (based on trailing EBITDA $1.217b); interest coverage ~8.5x. Valuation signals: P/E ~28.8x, P/B ~6.24x, P/S ~16.4x, EV/EBITDA ~74x. Note: four-quarter data shows a softer Q1 2025 vs prior quarter, with higher seasonal volumes in Q4 prior year. Highlights on cash-generating efficiency and deleveraging needs are central to the investment thesis.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
4.90B |
1.17% |
-5.45% |
| Gross Profit |
1.81B |
3.05% |
-3.38% |
| Operating Income |
957.48M |
6.93% |
-10.63% |
| Net Income |
698.42M |
7.31% |
-11.03% |
| EPS |
5.43 |
7.10% |
-10.98% |
Key Financial Ratios
operatingProfitMargin
19.5%
operatingCashFlowPerShare
$5.78
freeCashFlowPerShare
$5.04
dividendPayoutRatio
30.1%
Management Commentary
No earnings call transcript or direct management quotes were provided in the prompt. As a result, quotes and thematic management insights are not available. If a transcript is supplied, a themes-based synthesis (strategy, operations, market conditions) with verbatim quotes would be added here.
Forward Guidance
Management commentary for Q1 FY2025 was not included in the prompt. Based on the disclosed results and industry dynamics, forward-looking considerations include: (i) macro cyclicality in global industrials and aerospace capex; (ii) potential for productivity gains and price realization to support margin stability amid input-cost volatility; (iii) ongoing deleveraging pressure given elevated net debt to EBITDA (roughly 8x). The company generated solid cash flow and maintains a track record of returning capital, including dividends and share repurchases. Investors should monitor: aerospace end-market demand (commercial and defense),OEM content on Diversified Industrial, supply chain normalization, raw material costs, commodity price trends, and the cadence of order backlogs to gauge revenue resilience. Likely range scenarios: base case with modest revenue growth and stable margins; upside if aerospace OEM spend accelerates; downside if macro weakness or supply constraints exacerbate price-cost pressure. Key performance indicators to watch: quarterly EBITDA margin progression, free cash flow realization post-working-capital movements, and progress toward deleveraging given current debt levels.