ID: 22936 Date: 19 Jan 2010

Parker Hannifin Corporatio, the global leader in motion and control technologies, reported results for the fiscal 2010 second quarter ending December 31, 2009. Fiscal 2010 second quarter sales were $2.4 billion, an increase of 5.3 percent compared with the first quarter of fiscal 2010 and a decline of 12.4 percent from $2.7 billion in the second quarter a year ago. Fiscal 2010 second quarter net income was $104.6 million, an increase of 42.3 percent compared with the first quarter of fiscal 2010 and a decline of 32.7 percent compared with $155.4 million in the second quarter of fiscal 2009. Fiscal 2010 second quarter earnings per diluted share of $0.64, increased 41.6 percent from the first quarter of fiscal 2010 and declined 33.1 percent compared with $0.96 in the second quarter a year ago. Cash flow from operations for the first six months of fiscal 2010 was $606.3 million, or 13.2 percent of sales, compared with $444.5 million, or 7.7 percent of sales in the same prior year period.

"This quarter's results largely reflect the execution of our Win Strategy including the benefits of actions we have taken to restructure our operations since the recession began," said Chairman, CEO and President Don Washkewicz. "Notably, our performance has improved significantly relative to the first quarter of the year. Considering that our second quarter is typically our weakest, our margin performance this quarter was most impressive with decremental margins at just 10.6 percent. Total segment operating margins exceeded 10 percent at this low point in the cycle and were equal to last year. These are strong indicators that we are managing through this unprecedented downturn very effectively.

"Although the effects of the global recession continue to linger, we are encouraged to see Parker's order trends improve sequentially for the second consecutive quarter. Organic sales declined approximately 16 percent in the quarter, while foreign currency translation positively impacted sales by approximately 4 percent. Operating cash flow year to date of 13.2 percent, another critical measure of our performance, was well above our targeted level of 10 percent. Our strong cash performance and balance sheet management throughout the recession has enabled us to pay down our outstanding debt by approximately $1 billion in the past twelve months, bringing our current debt-to-debt equity ratio below 30 percent and further strengthening our balance sheet."

Segment Results

In the Industrial North America segment, second quarter sales declined 14.7 percent to $847.2 million, and operating income increased 6.3 percent to $114.4 million, compared with the same period a year ago.

In the Industrial International segment, second quarter sales declined 10.6 percent to $932.1 million, and operating income declined 28.2 percent to $82.6 million, compared with the same period a year ago.

In the Aerospace segment, second quarter sales declined 15.4 percent to $400.6 million, and operating income declined 41.1 percent to $41.0 million, compared with the same period a year ago.

In the Climate & Industrial Controls segment, second quarter sales declined 2.4 percent to $174.9 million, and operating income increased 147.9 percent to $6.1 million, compared with the same period a year ago.

Orders

In addition to financial results, Parker also reported a decline of 7 percent in total orders for the quarter ending December 31, 2009, compared with the same quarter a year ago. Parker reported the following orders by operating segment:

* Orders declined 3 percent in the Industrial North America segment, compared with the same quarter a year ago.

* Orders were unchanged in the Industrial International segment, compared with the same quarter a year ago.

* Orders declined 27 percent in the Aerospace segment on a rolling 12 month average basis.

* Orders increased 6 percent in the Climate and Industrial Controls segment, compared with the same quarter a year ago.

Outlook

For fiscal 2010, the company has increased its guidance for earnings from continuing operations by 44 percent to the range of $2.40 to $2.80 per diluted share.

Washkewicz added, "With our actions to drive strong margin and cash flow performance taking full effect, and what we believe to be the early signs of a recovery emerging, we are anticipating a strong second half to our fiscal year and have raised our guidance appropriately. Our priorities will remain unchanged as we progress through this fiscal year focused on executing the Win Strategy and managing for cash while simultaneously targeting strong margin performance. Parker's management remains proud of our worldwide team of employees who has made these results possible. As the recovery unfolds, Parker's leading market position, global scale and balance, end market breadth, and solid financial and operational fundamentals position us well for profitable growth."