Industrial machinery company Parker-Hannifin (NYSE: PH) beat Wall Street’s revenue expectations in Q1 CY2026, with sales up 10.6% year on year to $5.49 billion. Its non-GAAP profit of $8.17 per share was 4.4% above analysts’ consensus estimates.

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“Our global team delivered another quarter of record performance,” said Jenny Parmentier, Chairman and Chief Executive Officer.

Company Overview

Founded in 1917, Parker Hannifin (NYSE: PH) is a manufacturer of motion and control systems for a wide variety of mobile, industrial and aerospace markets.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, Parker-Hannifin’s sales grew at a solid 9.1% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers, a helpful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Parker-Hannifin’s recent performance shows its demand has slowed as its annualized revenue growth of 2.9% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.

We can dig further into the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Parker-Hannifin’s organic revenue averaged 2.8% year-on-year growth. Because this number aligns with its two-year revenue growth, we can see the company’s core operations (not acquisitions and divestitures) drove most of its results.

This quarter, Parker-Hannifin reported year-on-year revenue growth of 10.6%, and its $5.49 billion of revenue exceeded Wall Street’s estimates by 1.6%.

Looking ahead, sell-side analysts expect revenue to grow 5.7% over the next 12 months. Although this projection indicates its newer products and services will catalyze better top-line performance, it is still below the sector average. At least the company is tracking well in other measures of financial health.

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Operating Margin

Parker-Hannifin has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 18.7%. This result isn’t too surprising as its gross margin gives it a favorable starting point.

Looking at the trend in its profitability, Parker-Hannifin’s operating margin rose by 5.5 percentage points over the last five years, as its sales growth gave it immense operating leverage.

This quarter, Parker-Hannifin generated an operating margin profit margin of 20.7%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Parker-Hannifin’s EPS grew at 18.5% compounded annual growth rate over the last five years, higher than its 9.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Parker-Hannifin’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, Parker-Hannifin’s operating margin was flat this quarter but expanded by 5.5 percentage points over the last five years. On top of that, its share count shrank by 2.6%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Parker-Hannifin, its two-year annual EPS growth of 11.5% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.

In Q1, Parker-Hannifin reported adjusted EPS of $8.17, up from $6.94 in the same quarter last year. This print beat analysts’ estimates by 4.4%. Over the next 12 months, Wall Street expects Parker-Hannifin’s full-year EPS of $30.73 to grow 8.3%.

Key Takeaways from Parker-Hannifin’s Q1 Results

It was encouraging to see Parker-Hannifin beat analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, its full-year EPS guidance missed and its adjusted operating income fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 4.3% to $907.04 immediately after reporting.

Parker-Hannifin’s latest earnings report disappointed. One quarter doesn’t define a company’s quality, so let’s explore whether the stock is a buy at the current price. If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).