Parker Hannifin Corp., Cleveland, OH, a manufacturer of motion and control technologies, reported sales of $2.3 billion for its fiscal year 2009 third quarter ended March 31, down 26.3% from the same quarter a year ago. Profit declined 79.1% to $53.4 million. Results include expenses related to legal proceedings associated with the company's Parker ITR subsidiary, which were largely offset by an ITR related net tax benefit.
"Third quarter results reflect the impact of the global recession," CEO and President Don Washkewicz said. "Weakness in customer order trends that began in the second quarter continued through the third quarter across almost all markets.
The company has already implemented a series of cost-reduction measures, including workforce reductions, a wage freeze, select early retirement incentives, and a 10% reduction in salaries globally.
Segment Results In the Industrial North America segment, third-quarter sales declined 21.2% to $857 million, and operating income declined 50.6% to $73.1 million, compared with the same period a year ago. In the Industrial International segment, third-quarter sales decreased 37.8% to $836.8 million, and operating income declined 82.4% to $38.3 million.
Third-quarter sales In the Aerospace segment increased 2.1% to $480 million, and operating income declined 3.9% to $65.7 million.
In the Climate & Industrial Controls segment, third-quarter sales declined 38.9% to $170.9 million, and the segment recorded an operating loss of $7.4 million, compared with an operating profit of $18.3 million in the third quarter of fiscal year 2008.
Orders In addition to financial results, Parker also reported a decline of 34% in total orders for the quarter ending March 31, 2009, compared with the same quarter a year ago.
In the Industrial North America segment, orders declined 35%.
Compared with third quarter of fiscal year 2008, orders in the Industrial International segment declined 41%.
Orders declined 12% in the Aerospace segment on a rolling 12-month average basis.
Orders declined 36% in the Climate and Industrial Controls segment, compared with the same quarter a year ago.
Outlook "We are proud of the fact that our decline in operating profit during the quarter was 33.7% of the decline in revenue, but was only 28% excluding acquisitions. This is a clear indication that we are managing through the downturn effectively, Washkewicz said. "While the environment we are operating in holds many uncertainties, we anticipate that conditions will not improve appreciably in the near-term and order levels are expected to be similar to what we experienced in the third quarter. Further cost reductions and managing for cash will continue to be our priorities as we close out the fiscal year. "