Parker-Hannifin reported a robust second quarter for fiscal year 2025, delivering record adjusted segment operating margins and EPS despite top-line pressure from divestitures and currency headwinds. The company posted revenue of $4.7426 billion and adjusted EPS of $6.53 (GAAP EPS of $7.37), with an adjusted segment operating margin of 25.6%—a Q2 record driven by the Win strategy and strength in the Aerospace segment. Aerospace continued to lead margin expansion (adjusted margin 28.2% +170 bps YoY) on a 14% organic revenue gain, underpinned by stronger aftermarket (>$20% growth) and solid OEM growth. Across the portfolio, Parker achieved a broad-based margin expansion of 110 basis points, while orders rose 5% YoY, led by Aerospace at roughly +9% and continued positive but more modest recovery in longer-cycle industrial segments.
The balance sheet benefited from a substantial debt-reduction program, including $1.1 billion of net debt reduction in the quarter and approximately $1.5 billion year-to-date, funded by $620 million of divestiture cash proceeds. Year-to-date CFOA reached a record ~ $1.7 billion (17.4% of sales) with free cash flow of about $1.5 billion (15.2% of sales). Management reaffirmed FY25 momentum with organic growth guidance near 2% for the year, supported by an aerospace growth outlook of about 11% and a still-challenging but turning industrial North America market (organic growth midpoint around -2.5%), with international flat.
Guidance calls for an adjusted margin of 25.8% for the full year (up 90 bps vs FY24), a full-year adjusted EPS of $26.70 (GAAP $24.76), and free cash flow of $3.0–3.3 billion. For Q3’25, management projected revenue of about $4.9 billion with organic growth of ~1.5% and adjusted segment margin of ~25.6%, implying continued margin discipline even as the top line remains modestly challenged by currency and divestiture effects. Overall, the quarter reinforces Parker’s resilience through a mixed macro and highlights the Win framework as a driver of sustained profitability and cash generation. Investors should monitor aerospace aftermarket momentum, long-cycle industrial recovery, currency volatility, and the pace of the industrial recovery in North America versus International geographies.