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August 22, 2025 • 4 min read
Parker-Hannifin Corp. (PH), a global leader in motion and control technologies, recently released its annual 10-K report for the fiscal year ending June 30, 2025. For investors and industry watchers, these filings are a treasure trove of information. Let's dive into the numbers from their latest financial disclosure to see how the engineering giant performed.
Overall, the company presented a story of strategic execution, with a slight dip in revenue more than offset by significant gains in profitability, largely thanks to a soaring aerospace business and savvy portfolio management.
At first glance, Parker-Hannifin's top line saw a marginal decrease, with net sales coming in at $19.85 billion, down from $19.93 billion in fiscal 2024. However, the real story is on the bottom line. Net income attributable to shareholders surged to $3.53 billion, a substantial 24% increase from the $2.84 billion reported last year.
How did they achieve this? Key factors include an improved gross profit margin, which rose to 36.9% from 35.8%, and a significant $273 million gain on the sale of businesses. Furthermore, the company's effective tax rate dropped to 14.0% from 20.9% in the prior year, providing another boost to net income.
To better understand the flow from revenue to profit, the following chart visualizes the company's income statement.
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Parker-Hannifin operates through two main segments, and their performances in 2025 were starkly different.
Diversified Industrial Segment: This is the company's largest division, providing a vast array of motion-control systems to markets like industrial equipment and transportation. This segment faced headwinds, with sales dropping 5.5% to $13.67 billion. The company cited weaker demand in Europe as a primary cause. Despite the sales decline, the segment managed to improve its operating margin to 22.8% from 22.0%, a testament to strong cost controls. However, its backlog—an indicator of future revenue—decreased to $3.66 billion from $4.18 billion, suggesting that the softer demand may persist.
Aerospace Systems Segment: This segment was the standout performer. It supplies flight control systems, fuel systems, and other components to commercial and military aircraft. Sales here jumped an impressive 13% to $6.19 billion. This growth was fueled by strong volume in both commercial and defense aftermarkets. Even more impressively, the operating margin expanded significantly, rising from 20.3% to 23.3%. With its backlog growing to $7.39 billion, the outlook for the aerospace business appears robust.
Parker-Hannifin was active in reshaping its business portfolio and rewarding its shareholders.
The company's bottom line benefited greatly from strategic divestitures, including the sale of its CFC and non-core filtration businesses, which generated net proceeds of $621 million. On the acquisition front, the company announced an agreement to purchase Curtis Instruments, Inc. for approximately $1.0 billion, signaling its ongoing commitment to strategic growth.
Shareholders also saw continued strong returns. The company has now increased its annual dividend for 69 consecutive years, a remarkable record. In fiscal 2025, dividend payments totaled $861 million. Parker-Hannifin was also aggressive in repurchasing its own stock, spending approximately $1.77 billion on buybacks throughout the year, a clear sign of management's confidence in the company's long-term value.
Parker-Hannifin's 2025 results highlight a company successfully navigating a mixed economic environment. The strength of its Aerospace Systems segment provided a powerful engine for growth and profitability, offsetting the softness in its larger industrial markets. The company's disciplined cost management and strategic portfolio adjustments have created a more profitable and resilient enterprise. Moving forward, the key will be to watch how the industrial segment fares and how smoothly the company integrates its new acquisitions while continuing to capitalize on the booming aerospace market.
Last updated: August 22, 2025