Earnings Recap — Q4 FY2026
CY Q3 2026 · Reported August 6, 2026 · Beat 7 of last 7 quarters
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Parker-Hannifin's strong order growth and record backlog, particularly in aerospace and industrial, signal continued strength in the broader industrial and aerospace supply chains that support AI infrastructure buildout. The company's data center exposure, while still small at ~1.5% of sales, is growing and includes liquid cooling components, which could benefit from increasing AI data center thermal management demand. The pending CIRCOR acquisition adds flight-critical capabilities, further diversifying Parker's aerospace portfolio.
Parker-Hannifin delivered record Q4 FY2026 results: sales up 10% reported, 8% organic, adjusted segment operating margin of 28.0% (up 110 bps), and adjusted EPS of $9.27 (up 21%). Full-year sales were a record $21.5B, with organic growth of 6.6% and adjusted segment operating margin of 27.3%, up 120 bps. Orders were strong across all segments: total orders up 19% on a 3-month comparison (12% on rolling 12), with North America up 16%, International up 24%, and Aerospace up 18%. The company announced $15B in capital deployment actions, including the pending acquisitions of Filtration Group and CIRCOR's aerospace and defense business, and reduced net debt to adjusted EBITDA to 1.4x.
Management raised the adjusted segment operating margin target to 30% by FY2031, a 300 bps increase, and stated long-term goals of 4-6% organic growth, 17% free cash flow margin, and >10% adjusted EPS growth. For FY2027, they guided organic growth of 7% at the midpoint (range 5.5-8.5%), with positive growth across all market verticals for the first time. Adjusted segment operating margin is guided to 27.7% at the midpoint, up 40 bps, with incrementals near the top of the 30-35% range. Adjusted EPS guidance is $34.75 at the midpoint, with a range of plus or minus $0.50. The guidance excludes the pending Filtration Group and CIRCOR acquisitions, which are expected to close in the second half of calendar 2026. Management also announced a shift to rolling 12-month order reporting for the Industrial segment starting FY2027, citing a more diversified portfolio with longer-cycle businesses now representing ~65% of pro forma sales.
“We delivered record fiscal year '26 sales of $21.5 billion, surpassing $20 billion for the first time in Parker's history. Organic growth accelerated to 6.6% and adjusted segment operating margin expanded 120 basis points to a record 27.3%.”
on Record FY2026 performance
“We are raising it by 300 basis points to 30% by fiscal year '31.”
on New margin target
“For the first time ever, we are guiding positive sales growth across all market verticals, resulting in an organic growth forecast of 7% at the midpoint.”
on FY2027 guidance
What are the final hurdles left to close the Filtration Group and CIRCOR? Any major hurdles?
No major hurdles. Both are expected to close during the second half of calendar year 2026 (first half of fiscal year), subject to customary conditions and regulatory clearances.
On the strength of orders on the rolling 3 basis in the quarter, particularly in international, what was the catalyst?
International orders were driven by electronics and in-plant, with double-digit growth in Asia Pacific and mid-single-digit in EMEA. Positive orders across all major market verticals.
Can you talk about the appetite or bandwidth to do incremental deals in '27, or will it be a year focused on integrating the two businesses?
We will continue to actively deploy capital, but integration of Filtration Group and CIRCOR will be a focus. Leverage will be around 3x after these deals, and it will take about 6 quarters to get back to 2x. The pipeline work never stops, but we will stay true to what makes sense.