Parker Hannifin Sales Fall 15.1% in Fiscal 2009

Cleveland, OH-based Parker Hannifin Corp., manufacturer of motion and control technologies, reported sales for the fiscal year 2009 were $10.3 billion, a decline of 15.1% from the previous year. Profit for the year fell 46.4% to $508.5 million. "We started the year strongly, however, our performance in the second half of the year reflected the impact of the ongoing global recession, which resulted in significantly reduced order rates," said CEO and President Don Washkewicz.

Fiscal 2009 fourth quarter sales were $2.2 billion, a decline of 33.9% from $3.3 billion in the same quarter a year ago. Profit for the fourth quarter declined 80.4% to $49.5 million from $252.6 million in the fourth quarter of fiscal 2008.

Washkewicz added: "Our fourth quarter performance was influenced by order rates that declined year-over-year and sequentially from the third quarter levels. This led to a 32% decline in organic sales for the quarter …The decline in sales was the primary driver of lower profitability levels, and our Industrial International segment was hit particularly hard as reductions in workforce have taken longer to implement. However, with cash being our primary focus, I am particularly pleased that fourth quarter cash flow reached such a strong level."

The president said that in fiscal 2010, the company will continue to focus on cash, while maintaining productivity and reducing inventories. In the past year the company has reduced its work force to align with customer order rates, wage freeze, reduced work weeks and "significantly reduced discretionary spending."

By Segment
In the Industrial North America segment, fourth-quarter sales declined 33.3% to $777.5 million, and operating income declined 67% to $53.7 million, compared with the same period a year ago. For the full year, Industrial North America sales declined 12.1% to $3.7 billion, and operating income declined 35 % to $394.9 million, compared with fiscal 2008.

In the Industrial International segment, fourth-quarter sales declined 42.6% to $793.2 million, and the segment reported an operating loss of $5.7 million, compared with an operating profit of $213 million in the same period a year ago. For the full year, Industrial International sales declined 22.2% to $3.9 billion, and operating income declined 55.6% to $350.7 million, compared with fiscal 2008.

In the Aerospace segment, fourth-quarter sales decreased 11.5% to $451.1 million, and operating income declined 19.7% to $58.5 million, compared with the same period a year ago. For the full year, Aerospace sales increased 2.5% to $1.9 billion, and operating income increased 4.6% to $262 million, compared with fiscal 2008.

In the Climate & Industrial Controls segment, fourth-quarter sales declined 34.6% to $189.2 million, and the segment recorded an operating profit of $0.9 million, compared with an operating profit of $20.3 million in the same period a year ago. For the full year, Climate & Industrial Controls sales decreased 24.4% to $795.3 million, and the segment reported an operating loss of $3.7 million, compared with an operating profit of $59.5 million in fiscal 2008.

Orders
Parker reported a decline of 38% in total orders for the quarter ending June 30, 2009, compared with the same quarter a year ago.Parker reported the following orders by operating segment:

• Orders declined 40% in the Industrial North America segment, compared with the same quarter a year ago.
• Orders declined 43% in the Industrial International segment, compared with the same quarter a year ago.
• Orders declined 22% in the Aerospace segment on a rolling 12-month average basis.
• Orders declined 31% in the Climate and Industrial Controls segment, compared with the same quarter a year ago.