WASHINGTON (dpa-AFX) - Motion and control equipment maker Parker Hannifin Corp. (PH) on Tuesday reported a 12 percent increase in third-quarter profit, reflecting strong revenue growth at its Industrial North America segment. Both earnings and revenue topped analysts' estimates.
The company also raised its earnings outlook for fiscal year 2012 and hiked its quarterly dividend by 5 percent.
Separately, the company said it has agreed to acquire UK-based Olaer Group, a maker of advanced hydraulic accumulator and cooling technologies that provide solutions for energy, mobile and industrial markets. Terms of the transaction were not disclosed.
Parker recorded a 6 percent increase in organic sales for the third quarter, led by a double-digit increase at the North America Industrial segment.
Industrial North America sales increased 11.6 percent, while Industrial International segment sales edged down 0.5 percent. The Aerospace segment recorded a 7.7 percent increase in sales, while Climate and Industrial Controls sales declined 6 percent from last year.
Don Washkewicz, Chairman, CEO and President of Parker Hannifin, said, 'This quarter's results benefited, in part, from the favorable resolution of prior year tax filings, however, all-time record quarterly earnings were largely achieved as a result of strong operating performance in North America.'
Third-quarter net income was $312.07 million or $2.01 per share, up from $279.59 million or $1.68 per share in the year-ago period. On average, 14 analysts polled by Thomson Reuters expected earnings of $1.71 per share. Analysts' estimates typically exclude special items.
Net sales grew 4.7 percent to $3.39 billion from $3.24 billion in the prior-year quarter and topped analysts' consensus estimate of $3.28 billion.
For fiscal 2012, Parker increased its guidance for earnings from continuing operations to a range of $7.30 to $7.50 per share from the prior range of $6.90 to $7.30 per share. Analysts expect the company to earn $7.08 per share.
Separately, Parker said its board of directors increased the quarterly cash dividend to $0.41 per share of common stock and declared a quarterly dividend, payable June 1, to shareholders of record as of May 10. The dividend represents a 5 percent increase over the prior quarterly dividend of $0.39 per common share.
Parker has agreed to acquire Olaer Group, which has annual sales of about 150 million euros, or $200 million, and employs 550 people. Olaer has manufacturing and sales facilities in the UK, France, Sweden and China, and sales companies in 14 countries.
Jeff Cullman, President of Parker's Hydraulics Group said, 'Importantly, Olaer has a solid reputation in our target growth markets such as oil and gas, power generation and renewable energy. The acquisition would also expand our product offering with the addition of cooling technologies and deepens our expertise in bladder accumulator technology.'
Upon completion of the transaction, Olaer will be integrated into Parker's Hydraulics Group as part of the Industrial Segment. Parker noted that about 88 percent of the sales will be reported as Industrial International and 12 percent reported as Industrial North America.
In Tuesday's regular session, PH is trading at $86.36, up $5.42 or 6.70 percent on 1.43 million shares.
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