PH · Q4 2026 Earnings

Bullish

Parker Hannifin

Reported August 6, 2026

30-second summary

Parker closed FY26 with Q4 revenue of $5.755B (+9.8% YoY / +8.0% organic) and adjusted EPS of $9.27, beating its own explicit Q4 guide of $5.5B / $8.16 by 4.6% and 13.6%. Q4 adjusted segment margin printed 28.0% — 60bps above the 27.4% guide and a new quarterly record — while FY26 landed at $32.31 adjusted EPS (+$1.11 vs prior FY midpoint of $31.20). FY27 guidance is a "record year" frame: organic sales 5.5-8.5%, adjusted EPS $34.25-35.25 (+6-9% YoY), and a raised long-term margin target of 30% by FY31 (+300bps from prior).

Headline numbers

EPS

Q4 FY2026

$9.27

+12.1% vs est.

Revenue

Q4 FY2026

$5.75B

+9.8% YoY

+3.3% vs est.

Gross margin

Q4 FY2026

39.1%

Operating margin

Q4 FY2026

26.5%

Key financials

Q4 FY2026

Metric	Q4 FY2026	Q4 FY2025	YoY	Q3 FY2026	QoQ
Revenue	$5.75B	$5.24B	+9.8%	$5.49B	+4.9%
EPS	$9.27	$7.69	+20.5%	$8.17	+13.5%
Gross margin	39.1%	37.4%	+170bps	36.8%	+230bps
Operating margin	26.5%	23.9%	+260bps	23.4%	+310bps

Guidance

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q4 FY2026	$5.39B to $5.61B	$5.755B	+$0.145B above high end	Beat
Adjusted EPS	Q4 FY2026	$8.16	$9.27	+$1.11 above guide (13.6% above)	Beat
Organic sales growth	Q4 FY2026	approximately 4%	8.0%	+400bps above guide	Beat
Adjusted segment operating margin	Q4 FY2026	27.4%	28.0%	+60bps above guide	Beat

New guidance

Metric	Period	Guide	YoY
Reported sales growth	FY2027	5.5% to 8.5%	—
Organic sales growth	FY2027	5.5% to 8.5%	—
Adjusted EPS	FY2027	$34.25 to $35.25	+6.0% to +9.1% YoY
GAAP EPS	FY2027	$30.00 to $31.00	—
Segment operating margin	FY2027	24.5% to 24.9%	—
Adjusted segment operating margin	FY2027	27.5% to 27.9%	+90bps to +60bps

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Adjusted EPS	FY2026	$31.20	$32.31	+$1.11 (3.6% raise)	Raised
Reported sales growth	FY2026	7.0%	8.3%	+130bps above prior guidance	Raised
Adjusted segment operating margin	FY2026	27.2%	27.3%	+10bps above prior guidance	Raised

Segment KPIs

Q4 FY2026

Segment	Q4 FY2026	Q4 FY2025	YoY
Diversified Industrial - North America	$2.221B	$2.075B	+7.0%
Diversified Industrial - International	$1.634B	$1.492B	+9.5%
Aerospace Systems	$1.9B	$1.676B	+13.4%

Other KPIs

Q4 FY2026

Segment	Q4 FY2026	Q4 FY2025	YoY
Total Backlog	$12.8B	—	—
Aerospace Systems Backlog	$8.5B	—	—
Parker Order Rate (12-month rolling)	+12%	—	—
Adjusted Segment Operating Margin - Q4	28.0%	26.9%	—
Adjusted Segment Operating Margin - FY	27.3%	—	—
Organic Sales Growth - Q4	8.0%	2%	—
Operating Cash Flow - FY	$4.4B	—	—
Share Repurchases and Dividends Returned	$2.0B	—	—

Management tone

Q4 FY25 "poised for growth" → Q1 FY26 industrial inflection in evidence → Q2 FY26 record fiscal year confidence → Q3 FY26 routine excellence → Q4 FY26 structural margin re-rating.

Four quarters ago Parker was defending margins through Industrial contraction; this quarter management raised the FY31 adjusted segment margin target by 300bps to 30% — the most consequential forward disclosure of the year. The verbatim frame in the release — "We are forecasting fiscal 2027 to be a record year for Parker supported by a broadening recovery in industrial markets and positive organic growth across all market verticals" — is a two-part shift. First, "record year" is the operating assumption, not the aspirational outcome. Second, "positive organic growth across all market verticals" removes the last hedges (transportation, ag, upstream oil & gas) that colored the prior three prints. The transition from "gradual industrial recovery" (Q4 FY25) to "broadening recovery" (Q4 FY26) is complete.

The long-term margin target raise reframes the equity story. When Parker set the 27% FY31 target, it looked ambitious against a 25-26% baseline; FY26 cleared it. Rather than let investors extrapolate freely, management anchored a new 30% ceiling and paced the walk with a modest FY27 step (27.5-27.9%). This is the language of a team that wants the multi-year margin narrative underwritten explicitly rather than left to consensus — and it dovetails with Q3's "no structural reason why sales won't reach order levels" framing. Together, the two anchors argue Parker is now a structurally higher-margin, higher-growth business than the pre-Lord/Meggitt/Filtration Group entity.

The FY27 EPS guide of 6-9% growth is the one place management remained conservative — below the >10% long-term target. Combined with a 12% trailing order rate and a $12.8B record backlog, the setup mirrors the FY26 baseline (initial guide 2-5%, actual 8.3%). The three-consecutive-quarter raise cadence is now the base case for FY27.

Answers to last quarter's watch list

Q4 beat margin vs. $5.5B / $8.16 explicit guide — Q4 revenue beat by 4.6%, adjusted EPS beat by 13.6%. The EPS beat margin re-widened sharply from Q3's 5.4%. The explicit dollar guide is NOT converging actuals to guide — management continues to build meaningful cushion, particularly on EPS.

Resolved positively

Aerospace organic stepping down to ~9% in Q4 — Aerospace segment reported +13.4% in Q4, well above the ~9% guide. The Q4 guide was conservatism, not moderation. The "fourth consecutive year of double-digit" narrative held.

Resolved positively

Industrial orders-to-sales conversion — DI North America Q4 reported growth accelerated to +7.0% (from Q3's +5.4% and Q2's +3.0%), matching the +7% order rate that ran for two quarters. FY27 guide of 5.5-8.5% organic implicitly assumes the conversion continues.

Resolved positively

Filtration Group close — The press release did not disclose a confirmed close date or segment-level synergy framing. FY27 guidance explicitly excludes the pending Filtration Group and CIRCOR Aerospace acquisitions, suggesting no assumed close within the fiscal year or an unresolved regulatory timeline.

Not resolved

Margin trajectory exit-rate — Q4 adjusted segment margin printed 28.0%, above the 27.4% guide. Management raised the FY31 target to 30%, effectively telegraphing 28%+ as the new normalized margin frame — but paced the FY27 step to 27.5-27.9% rather than committing to 28% immediately.

Resolved positively

Europe organic disclosure — DI International EMEA organic +0.6% in Q4 (reported +3.0%), essentially flat and decelerated from Q2's +2% inflection. Asia-Pac at +15.9% organic is carrying International; Europe crossed zero but has not accelerated.

Continue monitoring

What to watch into next quarter

Q1 FY27 print vs FY27 initial guide — Applying the 5.5-8.5% reported growth range to the $5.08B Q1 FY26 base implies $5.36B-$5.51B in Q1 FY27. Watch whether Q1 prints above the top end — a 10%+ Q1 report would set up the first FY27 guide raise, matching the FY26 cadence where Q1 was the first raise catalyst.

Filtration Group close disclosure — FY27 guide explicitly excludes both Filtration Group and CIRCOR Aerospace. Watch for a definitive close date on the Q1 FY27 call, and the first quantification of segment-level margin impact. If FY27 guide is revised mid-year to include Filtration Group, that becomes the FY27 catalyst.

Margin walk from 27.3% to 30% — FY27 guide implies +20-60bps to 27.5-27.9%. A print at or above 27.9% in the first half would accelerate the FY31 30% target timeline and validate the re-rating thesis; a print below 27.5% would raise questions about mix pressure from any inorganic contribution.

EMEA re-acceleration or slippage — At +0.6% organic in Q4, Europe is barely positive. Watch whether Q1 FY27 prints above +2% organic (re-inflection to the Q2 FY26 level) or slips back to zero. A negative EMEA organic print in FY27 would break the "positive organic growth across all market verticals" frame management just anchored.

Order rate trajectory from +12% — The 12-month rolling order rate accelerated from +8% at Q3 to +12% at Q4. Watch whether it holds above +10% into Q1 FY27, which would justify the FY27 organic guide's top-of-range 8.5%. A drop back to mid-single-digits would signal the +12% was a pull-forward.

FY27 EPS guide raise cadence — Initial FY27 adjusted EPS guide of $34.25-35.25 implies 6-9% growth, below the >10% long-term target. Watch whether Q1 FY27 delivers the first raise in the FY26 pattern, and by how much — a $0.50+ midpoint raise would signal FY27 shapes up like FY26's cumulative +$2.50 walk.

Sources

Parker Hannifin Q4 FY26 press release (SEC Exhibit 99.1): https://www.sec.gov/Archives/edgar/data/76334/000007633426000082/exhibit991q4fy26.htm
Tapebrief Q3 FY26 brief (prior-quarter guidance baseline, watch-list source)
Tapebrief Q2 FY26 brief (multi-quarter trajectory)
Tapebrief Q1 FY26 brief (multi-quarter trajectory)
Tapebrief Q4 FY25 brief (multi-quarter trajectory baseline)

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