Parker Hannifin is one of the best indicators of economic activity and it is not looking great

parker

Industrial giant Parker Hannifin acts like a global hardware store. Not much gets made or produced without a Parker Hannifin product powering the production process. Pumps, hoses, hydraulics, filters, refrigeration, pneumatics, valves, wires etc etc. Whether it is a car or aircraft, train or ship, semiconductor or hospital Parker probably has a part crucial to the process of manufacture or inside the product. So when Parker squeals it is generally a good indicator of how hard it is out there as it is Top 3 in pretty much everything it does.

From Parker’s Q3 FY2016 results:

Diversified Industrial Segment: North American third quarter sales decreased 13% to $1.25 billion and operating income was $202.2 million, compared with $235.5 million in the same period a year ago.  International third quarter sales decreased 11% to $1.02 billion and operating income was $105.2 million, compared with $139.5 million in the same period a year ago. 

Parker reported a decrease of 6% in orders for the quarter ending March 31, 2016, compared with the same quarter a year ago.  The company reported the following orders by business: 

  • Orders decreased 9% in the Diversified Industrial North America businesses;
  • Orders decreased 6% in the Diversified Industrial International businesses; and
  • Orders increased 1% in the Aerospace Systems segment on a rolling 12-month average basis.

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