Parker-Hannifin (PH 3.76%), an industrial conglomerate supplying motion and control technologies to industries ranging from aerospace to industrial equipment, released its earnings results on August 7, 2025, for Q4 FY2025. The highlights: Non-GAAP earnings per share reached $7.69 for Q4 FY2025, exceeding the consensus estimate of $7.10 (non-GAAP). Revenue (GAAP) measured $5.24 billion for Q4 FY2025, topping forecasts. Segment operating margin set a new record at 26.9% (adjusted). The quarter reflected strong performance in Aerospace, offsetting softer industrial activity. Management described the period as one of record profitability, margin gains, and robust cash flow, despite some continued weakness in core industrial segments.
| Metric | Q4 FY25(Three Months Ended June 30, 2025) | Q4 Estimate | Q4 FY24(Three Months Ended June 30, 2024) | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $7.69 | $7.10 | $6.77 | 13.6% |
| Revenue (GAAP) | $5.24 billion | N/A | N/A | N/A |
| Segment Operating Margin (Non-GAAP) | 26.9% | 25.3% | 1.6 pp | |
| Net Income (Non-GAAP) | $992 million | $884 million | 12.2% | |
| Adjusted EBITDA Margin | 26.8% | 26.4% | 0.5 pp |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q3 2025 earnings report.
Business Overview and Strategic Focus
Parker-Hannifin is a global manufacturer specializing in motion and control technologies, meaning it produces products and systems that help power, control, or move machinery in sectors like aerospace, factory automation, transportation, and energy. The company operates under two core divisions: Diversified Industrial, which supplies a broad range of components to industries worldwide, and Aerospace Systems, which provides systems and components for the aircraft market.
Its approach is grounded in the "Win Strategy," a business system focused on operational efficiency, customer satisfaction, and profitable growth. This strategy is supported by a decentralized management model, empowering local business units to respond quickly to customer needs. Parker-Hannifin maintains a broad customer base, with no single customer accounting for more than 4% of net sales for FY2024, which helps reduce business risk. Key current areas of focus include disciplined cost control, margin expansion, capital allocation, and advancing electrification through targeted acquisitions.
Quarter in Review: Financial and Operational Highlights
In Q4 FY2025, Parker-Hannifin's earnings (non-GAAP EPS of $7.69) and revenue ($5,243 million, GAAP) surpassed Wall Street estimates. Non-GAAP EPS was $7.69, or 14.0% higher than last year, and Revenue (GAAP) reached $5.24 billion, compared to $5.19 billion in Q4 FY2024. Segment operating margin reached a record 26.9% (adjusted), while net income on a Non-GAAP (adjusted) basis climbed 12% to $992 million.
This division, which supplies critical systems and components for aircraft such as hydraulic controls and engine systems, saw sales jump 9.7% to $1.68 billion. The segment's adjusted operating margin rose to 29.0%, up 1.9 percentage points from the prior year.
In Diversified Industrial, performance was mixed. North America sales fell 6.9%, mainly due to weaker demand in some industrial markets, but margins improved to a record 26.7% on an adjusted basis. Orders in this segment rose by 2%, marking the third consecutive quarter of order growth. Internationally, International sales in the Diversified Industrial segment improved 4.3%, with strong organic growth reported in Asia-Pacific (+6%) and Latin America (+4%), while Europe saw a 3.0% increase. The adjusted segment operating margin for the Diversified Industrial International Businesses improved to 24.7%.
Parker-Hannifin announced an agreement to acquire Curtis Instruments, Inc, which expands its offerings in electrification—a key growth area as more machinery shifts toward electric solutions. The company returned capital to shareholders by repurchasing $851 million in stock and completing $1.6 billion in buybacks for FY2025. On the dividend front, the quarterly payout was raised 10% to $1.80 per share, continuing a 69-year streak of annual dividend increases. Free cash flow for FY2025 was $3.8 billion.
Looking Ahead: Management Outlook and Investor Considerations
Parker-Hannifin’s management issued guidance for FY2026, expecting revenue growth of 2–5%, with organic sales growth set at approximately 3% at the midpoint. Adjusted earnings per share are forecast to range from $28.40 to $29.40, while adjusted segment operating margin is expected to remain strong at 26.3–26.7%. Aerospace is projected to remain the fastest-growing business, while Segment leadership confirmed plans to offset $375 million in annualized tariff costs, equal to about 3% of the cost of goods sold annually, through a mix of price adjustments, supply chain action, and cost reductions.
Management also noted that the overall business continues to face uncertainty in key industrial end markets, with visibility on the timing of a full recovery remaining limited. Investors should watch for trends in long-cycle orders, the pace of industrial demand rebound, sustainability of high margins in Aerospace (especially as the mix between higher-margin aftermarket and original equipment shifts), and the success of tariff mitigation efforts. The acquisition pipeline remains active, and the company continues to emphasize disciplined capital allocation. The quarterly dividend was raised 10% to $1.80 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
