Parker Hannifin Revises Quarterly Earnings Outlook

With quarterly earnings previously forecast to range from $1.10 and $1.30 per diluted share, the company now expects to earn between $1.05 and $1.15 cents per diluted share from continuing operations in the quarter. The company revised full-year earnings estimates to be between $4.60 and $4.80 per diluted share (which includes 47 cents per share from discontinued operations).

"We are revising our previously forecast earnings range because of greater-than-anticipated softening in the automotive market; slowdowns in the mobile markets in our International Industrial segment; and on-going inventory reductions," commented Chairman and CEO Don Washkewicz. "Even with this revision in our outlook, Parker is still expecting to achieve its first $8 billion year in revenues and an increase in reported earnings from continuing operations of approximately 50 percent."

Included in the company's revised estimated range of earnings are certain costs and tax credits as follows:

• The company will record approximately $6 million ($4 million after-tax) or three cents per diluted share in business realignment costs, including $4 million related to the closure of a facility in Hilden, Germany.
• The company will also record $2 million ($1 million after-tax) or one cent per diluted share in expenses associated with divestiture activities.
• As a result of recently concluded tax initiatives, the company anticipates recording an after-tax benefit of $12 million, or 10 cents per diluted share. In connection with these tax initiatives, the company incurred additional professional fees of $3 million ($2 million after-tax) or two cents per diluted share. The tax initiatives will reduce the company's ongoing effective tax rate by approximately one percent, from 30 to 29 percent, for the current fiscal year.