On Friday October 19, 2012,
Parker-Hannifin reported 2013 Q1 earnings, where we saw a decline in profit due
to Sales being down and an increase in the costs. They reported EPS of $1.57,
which missed analysts’ projects of 1.73, a miss of 9.24%, with revenue at
$239.74 million. This is compared to last year’s first quarter when the company
had an EPS of $1.91 with revenues of $297.02 million. This miss could be
representing the beginning of a strong slow down for the company. This does not
fall in line with our investment thesis for the company, where growth was
expected to pick with the United States economy. Along with this, a rise in
cost of goods sold has further squeezed the margins for a company that does not
necessarily have room for much further decreases. Their international
industrial segment declined by 8.9% year over year. This decline was much worse
than the model or the market anticipated. These factors combine to create a
situation where Parker-Hannifin was removed from the UASBIG portfolio.
-Matthew Buechele, Industrial Sector Head
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