Parker Hannifin FY2026 (June year-end): sales +8.3% to $21.5B on 13% organic aerospace growth, GAAP EPS +5% to $28.48 held back by last year's one-off gain and tax benefit; adjusted EPS +18%, record $12.8B backlog, and a $9.25B Filtration Group deal closed after year-end.
Revenue
$21.5B
+8.3% YoY
Net income
$3.6B
+3.3% YoY
Diluted EPS
$28.48
+5.0% YoY
Operating margin
21.6%
Headline: record year, but the GAAP profit line understates it
Parker Hannifin makes motion-control parts — hydraulics, filters, seals, valves, electric-drive controllers — plus a large aerospace business that supplies components and aftermarket parts for aircraft. In fiscal 2026 (the 12 months to June 30, 2026), sales rose 8.3% to $21.5 billion and every segment widened its margin. The aerospace unit did the most work: sales up 14.2%, segment margin up 2.7 points to 26.0%.
The bottom line looks much weaker than that: net income rose only 3.3% to $3.65 billion and diluted EPS rose 5.0% to $28.48. That gap is almost entirely about fiscal 2025, not 2026. Last year's profit included a $253 million gain from selling businesses (mainly the composites and fuel containment unit) and a $215 million one-time tax benefit from releasing a foreign valuation allowance (a tax asset the company had previously written down). Neither repeated, so the effective tax rate went from 14.0% to 20.0%. Pre-tax income, which is not affected by the tax items, rose 11.1% to $4.56 billion.
Parker's own "adjusted" EPS, which strips out those items plus amortization of acquired intangibles (a non-cash charge from past acquisitions), rose 18% to $32.31. That adjusted figure also excludes an $84 million refund of tariffs that lowered fourth-quarter cost of sales after the U.S. Supreme Court ruled in February 2026 that tariffs imposed under emergency-powers law (IEEPA) were unauthorized. So GAAP 2026 got a boost from a refund that should not recur.
Key figures
Metric
FY2026
FY2025
YoY Change
Net sales
$21,499M
$19,850M
+8.3%
Read 0 community reports on Parker Hannifin, or write your own.Write a report
*Parker's income statement has no "operating income" line. This is net sales minus cost of sales minus selling, general and administrative (SG&A) expenses — our calculation from the reported lines. Operating margin means the share of each sales dollar left after making the products and running the business, before interest, tax and other non-operating items. "Segment operating margin" is Parker's own measure of the two business segments' profit before corporate overhead, interest and tax.
Where the growth came from
Parker splits sales growth into pieces. Of the 8.3% reported increase, 6.6 points were organic (same businesses, same exchange rates), 1.2 points came from a weaker dollar making foreign sales worth more, and acquisitions added 1.2 points while businesses sold last year took away 0.7 points. The main deal was Curtis Instruments (electric-vehicle motor controllers), bought in September 2025 for about $1.0 billion, which contributed $237 million of sales.
Segment
FY2026 sales
YoY
Organic growth
Segment margin
FY2025 margin
Diversified Industrial — North America
$8,392M
+3.2%
+3.1%
24.3%
23.2%
Diversified Industrial — International
$6,046M
+9.3%
+3.9%
23.1%
22.2%
Aerospace Systems
$7,061M
+14.2%
+13.4%
26.0%
23.3%
Total
$21,499M
+8.3%
+6.6%
24.5%
23.0%
Aerospace (a third of sales) grew on "higher volume across all market segments, especially in the commercial OEM and aftermarket" — i.e., both new-aircraft parts and replacement parts/repairs for the existing fleet, which usually earns higher margins. Management credits the 270-basis-point margin gain (2.7 percentage points) mainly to volume, "partially offset by unfavorable mix," with aftermarket profitability and cost containment contributing "to a lesser extent."
Diversified Industrial (two-thirds of sales) is where the headline growth rate flatters less. North America grew just 3.1% organically, on demand from in-plant and industrial equipment, aerospace and defense and off-highway (construction and farm equipment), "partially offset by lower demand within the transportation market." International's 9.3% reported growth was mostly currency (3.4 points) and Curtis (2.0 points); organic growth was 3.9%, driven by Asia Pacific demand from electronics and semiconductor and industrial equipment customers. Margins still improved 100 basis points, from pricing, dropping lower-margin businesses sold in 2025, and (internationally) better mix.
The fourth quarter showed industrial demand picking up
The more useful signal for next year sits in the fourth quarter (April–June 2026), from the earnings release filed August 6:
Q4 sales rose 9.8% to $5.8 billion, with 8.0% organic growth — faster than the full-year 6.6%.
North America industrial organic growth was 4.9% and International 6.5%, with Asia Pacific up 16% organically (EMEA +1%, Latin America −3%).
Orders rose 19% year on year (Industrial North America +16%, International +24%, Aerospace +18% on a rolling 12-month basis). Orders are a leading indicator: they become sales in later quarters.
Backlog (signed orders not yet shipped) hit a record $12.8 billion: $8.5 billion in Aerospace and $4.3 billion in Industrial, where management says "orders exceeding shipments" in both regions drove the increase.
One caveat on reading the order numbers: from fiscal 2027 Parker will report all order growth on a rolling 12-month average instead of 3 months for the industrial side. On that smoother basis, total Q4 orders were up 12%, not 19%. The 19% figure uses the old method and captures a sharper recent jump.
Cash, costs and the balance sheet
Operating cash flow was a record $4.36 billion (20.3% of sales); after $459 million of capital spending, free cash flow was $3.9 billion. That funded the $1.0 billion Curtis deal, $1.0 billion of buybacks (1.2 million shares, down from $1.6 billion in 2025) and dividends. Diluted share count fell to roughly 128 million from roughly 130 million (derived from net income ÷ diluted EPS), adding about 1.6 points to EPS growth.
Two cost lines to note: stock-based compensation roughly doubled to $179 million from $97 million, and working capital absorbed more cash, with inventory days rising to 86 from 82.
Total debt at June 30 was $8.5 billion ($1.75 billion current, $6.77 billion long-term), down from $9.3 billion. That changed sharply after year-end: on August 13, 2026 Parker closed the $9.25 billion cash purchase of Filtration Group Corporation (FGC) from Madison Industries, funded mostly by drawing the full $7.75 billion on two new term loans plus commercial paper. It also agreed in May to buy CIRCOR Aerospace for about $2.55 billion, expected to close in the second half of calendar 2026, funded with new debt and cash. Together that is about $11.8 billion of acquisitions, about three times the year's free cash flow.
Takeaway: Parker's underlying business had a strong year — sales +8.3%, operating margin +1.1 points, free cash flow +17% — and the GAAP EPS gain of 5% is held down by last year's one-off gain and tax benefit, not by weakness. The bigger story for fiscal 2027 is the balance sheet: roughly $11.8 billion of filtration and aerospace acquisitions financed largely with new debt, which the company's own guidance does not yet include.
Outlook
Management's fiscal 2027 guidance (issued August 6, excluding FGC and CIRCOR Aerospace):
FY2027 guidance
Range
vs. FY2026
Reported / organic sales growth
5.5% to 8.5%
FY26 organic: 6.6%
Segment operating margin
24.5% to 24.9%
24.5%
Adjusted segment operating margin
27.5% to 27.9%
27.3%
GAAP diluted EPS
$30.00 to $31.00
$28.48 (+5% to +9%)
Adjusted diluted EPS
$34.25 to $35.25
$32.31 (+6% to +9%)
CEO Jenny Parmentier described "a broadening recovery in industrial markets and positive organic growth across all market verticals," and Parker raised its long-term adjusted segment margin target to 30% by fiscal 2031 (from 27%, which it passed this year). It also expects about $90 million of business realignment (restructuring) charges and $25 million of acquisition integration charges in fiscal 2027, and targets capital spending of 2.5% of sales.
Our read: The guidance looks achievable on the organic business alone — a 19% Q4 order jump and a record backlog support the sales range, and adjusted EPS growth of 6–9% is slower than this year's 18%. (The adjusted base already excludes the $84 million tariff refund, so that one-off is not inflating the comparison.) The number that will actually drive reported fiscal 2027 results, though, is FGC: $9.25 billion of purchase price means much higher interest expense and large new intangible amortization, and neither is in the guidance. The September-quarter 10-Q, where Parker says it will give the first purchase price allocation for FGC, is the first filing that will show how much of the acquired profit survives the extra interest cost. Also watch whether Industrial North America's organic growth (3.1% for the year, 4.9% in Q4) keeps accelerating; that is the part of the business most exposed to the industrial cycle.
Source: Parker Hannifin Form 10-K for the fiscal year ended June 30, 2026 (filed August 21, 2026), with fourth-quarter, order, adjusted-EPS and guidance figures from the August 6, 2026 earnings release (Form 8-K, Exhibit 99.1). Adjusted EPS and organic growth are company non-GAAP measures.