Oct. 20, 2009 (PR Newswire) -- CLEVELAND, Oct. 20 /PRNewswire-FirstCall/ -- Parker Hannifin Corporation (NYSE: PH), the global leader in motion and control technologies, today reported results for the fiscal 2010 first quarter ending September 30, 2009. Fiscal 2010 first quarter sales were $2.2 billion, a decline of 27 percent from $3.1 billion in the first quarter a year ago. Fiscal 2010 first quarter net income declined 71 percent to $73.5 million, from a record $250.2 million in the first quarter of fiscal 2009. Earnings per diluted share declined 70 percent to $0.45, compared with $1.50 in the previous period. Cash flow from operations for the first quarter of fiscal 2010 was $260.1 million, or 11.6 percent of sales, compared with $307.3 million, or 10.0 percent of sales in the prior year period.

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"Our results this quarter continue to reflect the impact of the global recession on our business, coupled with the fact that we are comparing current results with the record performance we achieved in the first quarter a year ago," said Chairman, CEO and President Don Washkewicz. "Our sales declined 28 percent organically in the quarter, while foreign currency translation negatively impacted sales by 1 percent and acquisitions contributed 2 percent to sales. We were pleased to note that orders, although down year-over-year, have steadily improved sequentially from the levels we witnessed in the June quarter, and our actions to reduce costs have begun to have a positive effect on margins."

"The implementation of the Win Strategy throughout our operations has allowed us to perform much better in this down cycle than in previous recessions. We continue to take additional actions to reduce costs and generate strong cash flows. These actions have helped us attain an impressive decremental marginal return on sales of 30 percent during the quarter. Importantly, our operating cash flows as a percentage of sales remained strong at 11.6 percent, well above our targeted level of 10 percent. This strong cash performance has enabled us to pay down our outstanding debt by an additional $162 million in the quarter, and positions us well for growth when the recovery ultimately takes hold."

Segment Results

In the Industrial North America segment, first quarter sales declined 29.3 percent to $783.1 million, and operating income declined 52.5 percent to $76.2 million, compared with the same period a year ago.

In the Industrial International segment, first quarter sales declined 30.5 percent to $850.3 million, and operating income declined 69.5 percent to $61.8 million compared with the same period a year ago.

In the Aerospace segment, first quarter sales decreased 12.9 percent to $416.9 million, and operating income declined 22.0 percent to $53.1 million, compared with the same period a year ago.

In the Climate & Industrial Controls segment, first quarter sales declined 27.0 percent to $187.0 million, and segment operating income declined 32.3 percent to $10.5 million, compared with the same period a year ago.

Orders

In addition to financial results, Parker also reported a decline of 25 percent in total orders for the quarter ending September 30, 2009, compared with the same quarter a year ago. Parker reported the following orders by operating segment:

--  Orders declined 27 percent in the Industrial North America segment,
compared with the same quarter a year ago.
--  Orders declined 25 percent in the Industrial International segment,
compared with the same quarter a year ago.
--  Orders declined 23 percent in the Aerospace segment on a rolling 12
month average basis.

--  Orders declined 17 percent in the Climate and Industrial Controls
segment, compared with the same quarter a year ago.

Outlook

For fiscal 2010, the company has increased its guidance for earnings from continuing operations to the range of $1.55 to $2.05 per diluted share.

Washkewicz added, "The major markets we serve present a mixed picture in terms of customer demand with some markets flattening out while others are beginning to show modest sequential improvement. While we do not believe we will see material changes in trends for the remainder of the calendar year 2009, we are cautiously optimistic that we are at the bottom of the cycle. Parker employees throughout the world continue to step up to the challenges and manage our company effectively through the downturn. Our priorities will remain unchanged as we progress through this fiscal year focused on managing for cash while simultaneously targeting strong operating margin performance."

NOTICE OF CONFERENCE CALL: Parker Hannifin's conference call and slide presentation to discuss its fiscal 2010 first quarter results are available to all interested parties via live webcast today at 10:00 a.m. ET, on the company's investor information web site, http://www.phstock.com. To access the call, click on the "Live Webcast" link. From this link, users also may complete a pre-call system test and register for e-mail notification of future events and information available from Parker.

With annual sales exceeding $10 billion in fiscal year 2009, Parker Hannifin is the world's leading diversified manufacturer of motion and control technologies and systems, providing precision-engineered solutions for a wide variety of mobile, industrial and aerospace markets. The company employs approximately 52,000 people in 48 countries around the world.