On this page of StockholderLetter.com we present the latest annual shareholder letter from PARKER HANNIFIN CORP — ticker symbol PH. Reading current and past PH letters to shareholders can bring important insights into the investment thesis.
PARKER HANNIFIN ANNUAL REPORT 2026
ENABLING ENGINEERING BREAKTHROUGHS THAT LEAD TO A BETTER TOMORROW
Letter to Shareholders Fiscal year 2026 was another outstanding year for Parker Hannifin. We had our safest year ever, delivered record performance across multiple measures, strengthened our portfolio, and crossed an important milestone: more than $20 billion in annual sales. We achieved these results amid continued economic uncertainty, geopolitical tension, and supply chain disruptions. Our achievements reflect the strength of the Parker team, the resilience of our portfolio, and the disciplined execution of The Win Strategy , our business system that creates sustained operational excellence and shareholder value. Parker s performance in fiscal 2026 included the following highlights: Returned nearly $2 billion to shareholders through a combination of share repurchases and dividends. Increased the annual dividend 11%, marking 70 consecutive fiscal years that Parker has increased its annual dividend per share paid. Cash generation remains a priority. Our ability to generate and deploy cash consistently provides flexibility to invest in organic growth, pursue value-adding acquisitions, return capital to shareholders, and strengthen Parker for the future. BUILDING A HIGHER GROWTH, HIGHER MARGIN PORTFOLIO Parker s portfolio transformation continued in fiscal 2026. We have deliberately shifted the company toward longer-cycle, higher-growth, higher-margin businesses where our interconnected technologies serve performance-critical markets, Net sales increased 8.3% to a record $21.50 billion, compared with $19.85 billion in fiscal year 2025. Organic sales growth was 6.6%. Segment operating margin increased 150 basis points to 24.5% as reported, or a record 27.3% adjusted, an increase of 120 basis points. Net income increased 3% to $3.6 billion, and adjusted net income was a record $4.1 billion, an increase of 16%. Earnings per share were $28.48 as reported, an increase of 5%. Adjusted earnings per share increased 18% to a record $32.31. Cash flow from operations was a record $4.4 billion, or 20.3% of sales. Todd Leombruno, Executive Vice President and Chief Financial Officer Jenny Parmentier, Chairman of the Board and Chief Executive Officer Andy Ross, President and Chief Operating Officer This Annual Report contains non-GAAP financial information that has been reconciled to comparable GAAP measures immediately following the Form 10-K.
and our global scale and operational excellence create differentiated competitive advantages. During the year, we committed $12.8 billion in capital to strategic acquisitions that enhance Parker s capabilities and strengthen our offering across our market verticals and secular growth trends: Curtis Instruments, Inc. - Acquired for $1 billion and completed in September 2025, Curtis adds advanced speed controllers, instrumentation, power conversion, and input technologies that broaden Parker s electrification platform. Filtration Group Corporation Acquired for $9.25 billion and completed in August 2026, this acquisition, combined with our existing filtration capabilities, creates one of the largest global industrial filtration businesses. The combination brings complementary technologies, expands our presence in key market verticals, and increases exposure to attractive aftermarket and recurring revenue streams. THE WIN STRATEGY DELIVERS, NEW TARGETS SET The Win Strategy is Parker s proven business system for performance, engagement, and growth. It provides a common operating framework across the company and continues to drive measurable improvements in safety, quality, on-time delivery, customer service, growth, productivity and margin expansion. Fiscal year 2026 was Parker s best year for safety performance as we achieved a 9% reduction in recordable incidents over the prior year. We remain in the top quartile for safety performance among our peer companies as we pursue our goal to be the safest industrial company in the world. In fiscal 2026, Parker also reached our fiscal 2029 target for adjusted segment operating margin three years early. This result demonstrates the power of our operating model and the strength of our execution. Our continued ability to execute by leveraging the tools in The Win Strategy and successfully integrating acquisitions gives us the confidence to set new five-year financial targets through fiscal 2031 that include: 4-6% organic sales growth 30% adjusted segment operating margin 17% free cash flow margin Greater than 10% adjusted earnings per share growth By deploying the full range of tools within The Win Strategy, we see continued opportunities to grow, expand margins, improve cash flow, and drive earnings growth, all while better serving our customers. CIRCOR s Commercial and Defense Aerospace business - Announced in May 2026 for $2.55 billion, this acquisition will expand Parker s aerospace and defense capabilities in mission-critical applications in a rapidly growing sector. Each of these businesses aligns with Parker s acquisition strategy and we believe offers meaningful opportunities for value creation through operational improvements, technology expansion, and synergy capture under The Win Strategy. The non-GAAP metrics included in our five-year targets for fiscal year 2031 could not be reconciled without unreasonable effort and applicable reconciliations are not included in this Annual Report.
POSITIVE CYCLE TRENDS AHEAD Parker enters fiscal year 2027 with momentum and a stronger portfolio positioned around secular growth trends across key market verticals. We are increasingly aligned with high-value applications throughout aerospace and defense and diversified industrial markets. In aerospace and defense, expected future growth is supported by new aircraft platforms, rising global defense spending, and sustained maintenance, repair, and overhaul demand. Within diversified industrial markets, recovery trends are becoming increasingly broad-based. Robust order activity and strong backlog reinforce our confidence that momentum is accelerating across these markets, supporting our expectation for positive organic growth in every market vertical in fiscal year 2027. The markets we serve have staying power and are critical to an evolving modern global economy. They can fluctuate, but they are durable over time. Parker s breadth of interconnected technologies, engineering expertise, and global customer relationships position us to serve performance-critical application needs where reliability, efficiency, and innovation matter most. LOOKING TO THE FUTURE WITH CONFIDENCE We expect fiscal 2027 to be another excellent year for Parker. Our priorities remain clear: improve safety, drive operational excellence, generate strong cash flow, integrate acquisitions successfully, invest for long-term growth, and deploy capital in ways that compound earnings per share growth and generate shareholder value. Parker is stronger, more focused, and better positioned than ever to fulfill our purpose: Enabling Engineering Breakthroughs that Lead to a Better Tomorrow. We are confident in our future and in our ability to continue building Parker as a technology leader, an acquirer of choice, and a compounder of shareholder returns. On behalf of the entire leadership team, thank you to our global team members for their dedication, performance, and commitment to our customers. And thank you to our shareholders for your continued confidence and support. We are proud of what Parker achieved in fiscal year 2026, and we are even more excited about the opportunities ahead. Sincerely, Jennifer A. Parmentier Chairman of the Board and Chief Executive Officer Andrew D. Ross President and Chief Operating Officer Todd M. Leombruno Executive Vice President and Chief Financial Officer September 2026
 • shareholder letter icon 9/18/2026 Letter Continued (Full PDF)
 • stockholder letter icon 9/22/2023 PH Stockholder Letter
 • stockholder letter icon 9/20/2024 PH Stockholder Letter
 • stockholder letter icon 9/19/2025 PH Stockholder Letter
 • stockholder letter icon More "Industrial Machinery & Equipment" Category Stockholder Letters
 • Benford's Law Stocks icon PH Benford's Law Stock Score = 75


PH Shareholder/Stockholder Letter Transcript:

PARKER HANNIFIN
ANNUAL REPORT
2026

ENABLING
ENGINEERING
BREAKTHROUGHS
THAT LEAD TO
A BETTER
TOMORROW

Letter to Shareholders
Fiscal year 2026 was another outstanding year for Parker Hannifin. We had our safest year ever,
delivered record performance across multiple measures, strengthened our portfolio, and crossed
an important milestone: more than $20 billion in annual sales.
We achieved these results amid
continued economic uncertainty,
geopolitical tension, and supply
chain disruptions. Our achievements reflect the strength of the
Parker team, the resilience of our
portfolio, and the disciplined
execution of The Win Strategy   ,
our business system that creates
sustained operational excellence
and shareholder value.
Parker   s performance in fiscal 2026
included the following highlights:
    Returned nearly $2 billion
to shareholders through a
combination of share repurchases
and dividends.
    Increased the annual dividend
11%, marking 70 consecutive fiscal
years that Parker has increased its
annual dividend per share paid.
Cash generation remains a priority.
Our ability to generate and deploy
cash consistently provides flexibility
to invest in organic growth, pursue
value-adding acquisitions, return
capital to shareholders, and
strengthen Parker for the future.
BUILDING A HIGHER   GROWTH,
HIGHER   MARGIN PORTFOLIO
Parker   s portfolio transformation
continued in fiscal 2026. We have
deliberately shifted the company
toward longer-cycle, higher-growth,
higher-margin businesses where
our interconnected technologies
serve performance-critical markets,
    Net sales increased 8.3% to a record
$21.50 billion, compared with
$19.85 billion in fiscal year 2025.
Organic sales growth was 6.6%.
    Segment operating margin
increased 150 basis points to
24.5% as reported, or a record
27.3% adjusted, an increase of
120 basis points.
    Net income increased 3% to $3.6
billion, and adjusted net income
was a record $4.1 billion, an
increase of 16%.
    Earnings per share were $28.48
as reported, an increase of 5%.
Adjusted earnings per share
increased 18% to a record $32.31.
    Cash flow from operations was
a record $4.4 billion, or 20.3%
of sales.
Todd Leombruno, Executive Vice President and Chief Financial Officer
Jenny Parmentier, Chairman of the Board and Chief Executive Officer
Andy Ross, President and Chief Operating Officer
This Annual Report contains non-GAAP financial information that has been reconciled to comparable GAAP measures immediately following the Form 10-K.

and our global scale and operational
excellence create differentiated
competitive advantages.
During the year, we committed
$12.8 billion in capital to strategic
acquisitions that enhance Parker   s
capabilities and strengthen our
offering across our market verticals
and secular growth trends:
    Curtis Instruments, Inc. - Acquired
for $1 billion and completed in
September 2025, Curtis adds
advanced speed controllers,
instrumentation, power conversion,
and input technologies that broaden
Parker   s electrification platform.
    Filtration Group Corporation Acquired for $9.25 billion and
completed in August 2026, this
acquisition, combined with our
existing filtration capabilities,
creates one of the largest global
industrial filtration businesses.
The combination brings
complementary technologies,
expands our presence in key
market verticals, and increases
exposure to attractive aftermarket
and recurring revenue streams.
THE WIN STRATEGY DELIVERS,
NEW TARGETS SET
The Win Strategy is Parker   s
proven business system for
performance, engagement, and
growth. It provides a common
operating framework across the
company and continues to drive
measurable improvements in
safety, quality, on-time delivery,
customer service, growth,
productivity and margin expansion.
Fiscal year 2026 was Parker   s best
year for safety performance as we
achieved a 9% reduction in
recordable incidents over the prior
year. We remain in the top quartile
for safety performance among our
peer companies as we pursue our
goal to be the safest industrial
company in the world.
In fiscal 2026, Parker also reached
our fiscal 2029 target for adjusted
segment operating margin three
years early. This result demonstrates
the power of our operating
model and the strength of our
execution. Our continued ability
to execute by leveraging the tools in
The Win Strategy and successfully
integrating acquisitions gives us
the confidence to set new five-year
financial targets through fiscal
2031 that include:
    4-6% organic sales growth
    30% adjusted segment
operating margin
    17% free cash flow margin
    Greater than 10% adjusted
earnings per share growth
By deploying the full range of tools
within The Win Strategy, we see
continued opportunities to grow,
expand margins, improve cash flow,
and drive earnings growth, all while
better serving our customers.
    CIRCOR   s Commercial and Defense
Aerospace business - Announced
in May 2026 for $2.55 billion, this
acquisition will expand Parker   s
aerospace and defense capabilities
in mission-critical applications in
a rapidly growing sector.
Each of these businesses aligns
with Parker   s acquisition strategy
and we believe offers meaningful
opportunities for value creation
through operational improvements,
technology expansion, and synergy
capture under The Win Strategy.
The non-GAAP metrics included in our five-year targets for fiscal year 2031 could not be reconciled without unreasonable effort and applicable reconciliations are not included in this Annual Report.

POSITIVE CYCLE
TRENDS AHEAD
Parker enters fiscal year 2027 with
momentum and a stronger portfolio
positioned around secular growth
trends across key market verticals.
We are increasingly aligned with
high-value applications throughout
aerospace and defense and
diversified industrial markets.
In aerospace and defense, expected
future growth is supported by new
aircraft platforms, rising global
defense spending, and sustained
maintenance, repair, and overhaul
demand. Within diversified industrial
markets, recovery trends are
becoming increasingly broad-based.
Robust order activity and strong
backlog reinforce our confidence
that momentum is accelerating
across these markets, supporting
our expectation for positive organic
growth in every market vertical in
fiscal year 2027.
The markets we serve have staying
power and are critical to an evolving
modern global economy. They can
fluctuate, but they are durable
over time. Parker   s breadth of
interconnected technologies,
engineering expertise, and global
customer relationships position
us to serve performance-critical
application needs where reliability,
efficiency, and innovation matter most.
LOOKING TO THE FUTURE
WITH CONFIDENCE
We expect fiscal 2027 to be
another excellent year for Parker.
Our priorities remain clear:
improve safety, drive operational
excellence, generate strong cash
flow, integrate acquisitions
successfully, invest for long-term
growth, and deploy capital in ways
that compound earnings per share
growth and generate shareholder
value.
Parker is stronger, more focused,
and better positioned than ever
to fulfill our purpose: Enabling
Engineering Breakthroughs that
Lead to a Better Tomorrow. We are
confident in our future and in our
ability to continue building Parker
as a technology leader, an acquirer
of choice, and a compounder of
shareholder returns.
On behalf of the entire leadership
team, thank you to our global team
members for their dedication,
performance, and commitment to
our customers. And thank you to
our shareholders for your continued
confidence and support.
We are proud of what Parker
achieved in fiscal year 2026, and
we are even more excited about
the opportunities ahead.
Sincerely,
Jennifer A. Parmentier
Chairman of the Board and
Chief Executive Officer
Andrew D. Ross
President and
Chief Operating Officer
Todd M. Leombruno
Executive Vice President
and Chief Financial Officer
September 2026


shareholder letter icon 9/18/2026 Letter Continued (Full PDF)
 

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