Analysis of Profitability Ratios
Quarterly Data
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Parker-Hannifin Corp., profitability ratios (quarterly data)
Based on: 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-K (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30).
The financial performance exhibits notable trends across key profitability and efficiency ratios over the observed quarters. Gross profit margin shows a consistent upward trajectory, rising from approximately 24% in late 2017 to over 30% by the end of 2022. This steady increase indicates improving cost management or enhanced pricing power contributing positively to the core profitability of the company.
Operating profit margin follows a similar upward trend until around late 2021, peaking close to 18%. However, it declines modestly thereafter, settling near 16% by the close of 2022. This pattern may suggest increased operating expenses or other factors affecting operational efficiency despite the strong gross margin performance observed.
Net profit margin experiences more volatility. Initially increasing from under 7% to above 12% in early 2021, it subsequently declines to approximately 7% by the end of 2022. This fluctuation might indicate variable impacts from non-operating items, tax considerations, or interest expenses affecting the bottom line beyond operating income.
Return on equity (ROE) demonstrates significant fluctuations as well. It rises steeply from around 16% in late 2017 to peak above 24% in 2018-2019, then gradually decreases to roughly 13.5% by the end of 2022. Such variation could reflect changes in financial leverage, net income, or equity base over time, impacting shareholder returns.
Return on assets (ROA) shows a comparable pattern to ROE but at a lower level, increasing from below 7% to a high of over 9% during 2018-2021, then declining to just above 4% at the end of the period. This decline suggests reduced asset utilization efficiency or profitability relative to total assets in the later years under review.
- Gross Profit Margin
- Consistent and steady improvement from approximately 24% to over 30% between 2017 and 2022, indicating enhanced production efficiency or pricing capabilities.
- Operating Profit Margin
- General upward trend until late 2021, peaking near 18%, followed by a slight decrease to about 16%, implying potential pressures on operating costs or expense control.
- Net Profit Margin
- Increasing trend up to early 2021 reaching over 12%, then a decline down to around 7%, suggesting the influence of non-operating elements on net profitability.
- Return on Equity (ROE)
- Fluctuates between 16% and 24% until 2019, followed by a decline to around 13.5% by year-end 2022, reflecting variability in earnings and equity structure.
- Return on Assets (ROA)
- Increases modestly to above 9% in the early years, then falls to just over 4%, indicating diminished asset efficiency or profitability in recent periods.
Overall, the company shows strong improvements in gross profitability metrics but faces challenges in maintaining stable net and operating margins alongside returns on equity and assets in the latter part of the analysis period. This pattern warrants further examination into cost structures, capital management, and external factors influencing bottom-line results.
Return on Sales
Return on Investment
Gross Profit Margin
Parker-Hannifin Corp., gross profit margin calculation (quarterly data)
| Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Gross profit | 1,437,999) | 1,437,319) | 1,207,178) | 1,158,396) | 1,059,855) | 1,048,912) | 1,127,835) | 1,031,553) | 892,360) | 846,212) | 803,284) | 935,739) | 815,209) | 854,770) | 941,889) | 920,774) | 869,706) | 884,471) | 981,592) | 924,583) | 801,603) | 831,773) | |||||||
| Net sales | 4,674,811) | 4,232,775) | 4,187,832) | 4,086,387) | 3,824,580) | 3,762,809) | 3,958,869) | 3,746,326) | 3,411,905) | 3,230,540) | 3,160,603) | 3,702,432) | 3,497,974) | 3,334,511) | 3,681,467) | 3,687,518) | 3,472,045) | 3,479,294) | 3,817,477) | 3,749,591) | 3,370,673) | 3,364,651) | |||||||
| Profitability Ratio | |||||||||||||||||||||||||||||
| Gross profit margin1 | 30.50% | 29.78% | 28.21% | 28.11% | 27.91% | 27.56% | 27.17% | 26.37% | 25.75% | 25.02% | 24.89% | 24.95% | 24.88% | 25.31% | 25.26% | 25.29% | 25.21% | 24.92% | 24.75% | 24.31% | 24.05% | 23.99% | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Gross Profit Margin, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | 6.65% | 7.20% | 5.26% | -1.41% | 2.74% | 3.20% | 4.84% | -0.25% | -1.35% | -7.82% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 30.44% | 28.74% | 26.91% | 26.14% | 25.52% | 25.71% | 26.30% | 27.08% | 26.83% | 25.98% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 34.51% | 33.64% | 33.19% | 32.83% | 32.55% | 32.36% | 32.28% | 32.14% | 32.23% | 30.80% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 23.29% | 24.24% | 24.55% | 24.52% | 25.22% | 24.26% | 24.19% | 24.97% | 22.43% | 18.80% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 37.79% | 37.36% | 36.99% | 35.56% | 34.22% | 32.95% | 31.98% | 32.34% | 32.06% | 31.52% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 12.70% | 12.74% | 12.56% | 12.99% | 13.39% | 13.36% | 13.52% | 13.34% | 13.00% | 13.26% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 20.43% | 20.53% | 20.38% | 20.49% | 20.17% | 19.94% | 19.40% | 17.59% | 15.79% | 13.98% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-K (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30).
1 Q2 2023 Calculation
Gross profit margin = 100
× (Gross profitQ2 2023
+ Gross profitQ1 2023
+ Gross profitQ4 2022
+ Gross profitQ3 2022)
÷ (Net salesQ2 2023
+ Net salesQ1 2023
+ Net salesQ4 2022
+ Net salesQ3 2022)
= 100 × (1,437,999 + 1,437,319 + 1,207,178 + 1,158,396)
÷ (4,674,811 + 4,232,775 + 4,187,832 + 4,086,387)
= 30.50%
2 Click competitor name to see calculations.
The financial data reveals several significant trends over the analyzed periods.
- Net Sales
- Net sales show a generally increasing trend from September 2017 through December 2022. Initial values around 3.36 billion US dollars incrementally rise to approximately 4.67 billion US dollars by the end of 2022. There are intermittent fluctuations, including slight decreases around late 2018 and 2019, and a notable dip in mid-2020, likely reflecting external economic impacts. However, after this period, net sales recover steadily, surpassing previous levels and reaching new highs.
- Gross Profit
- Gross profit exhibits a pattern broadly consistent with net sales but with some variability. Starting at about 831.8 million US dollars in late 2017, gross profit moves upward with fluctuations, including a decline in late 2019 and a sharper drop in mid-2020, mirroring the net sales trend. From late 2020 onward, gross profit increases markedly, peaking near 1.44 billion US dollars by the end of 2022, indicating improved profitability alongside rising sales volumes.
- Gross Profit Margin
- The gross profit margin steadily improves over the entire period assessed. From approximately 24.0% in the latter part of 2017, it increases incrementally, reaching over 30% by the end of 2022. This sustained margin expansion suggests enhanced operational efficiency, better cost management, or a more favorable sales mix contributing to higher profitability irrespective of sales volume fluctuations.
In summary, the company demonstrates resilience and growth in sales and profitability over the analyzed periods. Despite some periods of decline, gross profit margins have consistently improved, indicating strengthening financial health and effective management strategies to enhance earnings quality over time.
Operating Profit Margin
Parker-Hannifin Corp., operating profit margin calculation (quarterly data)
| Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Operating income | 623,033) | 601,515) | 780,968) | 745,965) | 679,145) | 641,147) | 713,787) | 644,722) | 535,788) | 476,361) | 450,491) | 522,279) | 324,088) | 455,591) | 550,396) | 559,909) | 472,447) | 490,149) | 559,169) | 503,988) | 389,141) | 430,101) | |||||||
| Net sales | 4,674,811) | 4,232,775) | 4,187,832) | 4,086,387) | 3,824,580) | 3,762,809) | 3,958,869) | 3,746,326) | 3,411,905) | 3,230,540) | 3,160,603) | 3,702,432) | 3,497,974) | 3,334,511) | 3,681,467) | 3,687,518) | 3,472,045) | 3,479,294) | 3,817,477) | 3,749,591) | 3,370,673) | 3,364,651) | |||||||
| Profitability Ratio | |||||||||||||||||||||||||||||
| Operating profit margin1 | 16.01% | 17.19% | 17.95% | 17.78% | 17.52% | 17.04% | 16.52% | 15.55% | 14.70% | 13.05% | 12.80% | 13.03% | 13.31% | 14.38% | 14.48% | 14.40% | 13.95% | 13.47% | 13.16% | 12.61% | 12.00% | 11.88% | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Operating Profit Margin, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | -4.62% | -3.58% | -5.33% | -11.99% | -6.98% | -6.53% | -4.66% | -10.80% | -12.18% | -20.36% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 16.97% | 14.94% | 13.97% | 14.56% | 13.81% | 13.87% | 14.27% | 14.56% | 13.82% | 12.32% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 15.48% | 14.85% | 14.55% | 13.90% | 16.33% | 15.97% | 15.69% | 15.50% | 12.54% | 10.81% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 6.92% | 7.40% | 6.05% | 7.05% | 8.12% | 7.31% | 8.58% | 7.86% | 6.82% | 4.72% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 19.73% | 19.05% | 18.12% | 17.55% | 17.31% | 17.37% | 18.03% | 18.36% | 17.95% | 16.90% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 12.80% | 12.78% | 12.65% | 13.15% | 13.47% | 13.50% | 13.61% | 13.50% | 13.19% | 13.19% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 8.63% | 8.73% | 8.07% | 7.93% | 7.81% | 7.75% | 7.70% | 5.93% | 4.61% | -3.59% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-K (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30).
1 Q2 2023 Calculation
Operating profit margin = 100
× (Operating incomeQ2 2023
+ Operating incomeQ1 2023
+ Operating incomeQ4 2022
+ Operating incomeQ3 2022)
÷ (Net salesQ2 2023
+ Net salesQ1 2023
+ Net salesQ4 2022
+ Net salesQ3 2022)
= 100 × (623,033 + 601,515 + 780,968 + 745,965)
÷ (4,674,811 + 4,232,775 + 4,187,832 + 4,086,387)
= 16.01%
2 Click competitor name to see calculations.
The financial data demonstrates notable trends in operating income, net sales, and operating profit margin over the quarters from September 2017 to December 2022.
- Operating Income
- Operating income exhibits considerable fluctuations throughout the period, with a general upward trajectory evident from mid-2020 onwards. Initial quarters show variability, with a peak around June 2018 followed by a decline at the end of 2019. A sharp decline is seen in early 2020, likely influenced by external economic factors, but recovery begins in the subsequent quarters. The company achieves its highest operating income figures in 2021, sustaining elevated levels through 2022, though a slight dip occurs in the last two quarters of 2022 compared to earlier peaks.
- Net Sales
- The net sales figures indicate gradual expansion over the given timeframe despite intermittent decreases. Early data points reveal relatively stable sales, with some reductions notably around late 2018 and late 2019. A significant drop occurs in mid-2020, which aligns temporally with the decline in operating income. Following this period, net sales progressively increase with some volatility but generally reach new highs by the end of 2022, reflecting growth and potential market recovery.
- Operating Profit Margin
- The operating profit margin generally trends upward over the analyzed period. Starting from around 12% in 2017, it gradually improves, surpassing 17% in several quarters during 2021 and 2022. This improvement suggests enhanced operational efficiency or cost management despite fluctuations in operating income and net sales. However, a slight decline in the margin is observed in the final quarters of 2022, indicating some pressure on profitability during that time.
Overall, the data reflects initial volatility with a pronounced impact reflected in mid-2020 across all three key indicators. However, the company demonstrates resilience with recovery and improved profitability margins in the following years, culminating in strong operating income and sales figures through 2021 and 2022. The marginal decline in the most recent quarters may warrant attention to maintain growth momentum and profitability.
Net Profit Margin
Parker-Hannifin Corp., net profit margin calculation (quarterly data)
| Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Net income attributable to common shareholders | 395,237) | 387,854) | 128,831) | 348,017) | 387,600) | 451,157) | 505,738) | 471,647) | 447,306) | 321,409) | 295,716) | 367,253) | 204,474) | 338,898) | 413,668) | 411,248) | 311,737) | 375,711) | 353,256) | 365,989) | 56,159) | 285,397) | |||||||
| Net sales | 4,674,811) | 4,232,775) | 4,187,832) | 4,086,387) | 3,824,580) | 3,762,809) | 3,958,869) | 3,746,326) | 3,411,905) | 3,230,540) | 3,160,603) | 3,702,432) | 3,497,974) | 3,334,511) | 3,681,467) | 3,687,518) | 3,472,045) | 3,479,294) | 3,817,477) | 3,749,591) | 3,370,673) | 3,364,651) | |||||||
| Profitability Ratio | |||||||||||||||||||||||||||||
| Net profit margin1 | 7.33% | 7.67% | 8.29% | 10.83% | 11.88% | 12.61% | 12.17% | 11.34% | 10.60% | 8.75% | 8.81% | 9.32% | 9.63% | 10.41% | 10.56% | 10.04% | 9.69% | 7.98% | 7.42% | 7.16% | 6.54% | 8.37% | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Net Profit Margin, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | -6.08% | -5.86% | -7.41% | -13.75% | -8.69% | -8.00% | -6.75% | -13.50% | -14.30% | -20.87% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 13.53% | 12.10% | 11.85% | 13.70% | 13.19% | 13.02% | 13.47% | 11.28% | 10.17% | 8.53% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 12.30% | 12.00% | 11.86% | 11.36% | 11.70% | 11.21% | 10.92% | 10.60% | 9.86% | 8.05% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 13.91% | 12.35% | 0.31% | -8.10% | -6.18% | -6.70% | -9.17% | -0.06% | -3.39% | -4.68% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 15.08% | 14.54% | 14.00% | 15.38% | 14.74% | 15.30% | 16.11% | 15.80% | 14.65% | 14.17% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 10.48% | 8.60% | 8.69% | 9.07% | 7.33% | 9.45% | 9.42% | 9.13% | 10.69% | 10.53% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 7.88% | 8.08% | 7.75% | 6.76% | 6.84% | 6.47% | 6.00% | 5.20% | 3.51% | -4.44% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-K (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30).
1 Q2 2023 Calculation
Net profit margin = 100
× (Net income attributable to common shareholdersQ2 2023
+ Net income attributable to common shareholdersQ1 2023
+ Net income attributable to common shareholdersQ4 2022
+ Net income attributable to common shareholdersQ3 2022)
÷ (Net salesQ2 2023
+ Net salesQ1 2023
+ Net salesQ4 2022
+ Net salesQ3 2022)
= 100 × (395,237 + 387,854 + 128,831 + 348,017)
÷ (4,674,811 + 4,232,775 + 4,187,832 + 4,086,387)
= 7.33%
2 Click competitor name to see calculations.
The financial performance demonstrates notable variability and several identifiable trends over the reviewed quarters.
- Net Income Attributable to Common Shareholders
- The net income shows significant fluctuations, with initial figures around 285 million USD, followed by a steep decline to approximately 56 million USD within a quarter. Subsequently, income increased markedly, peaking above 500 million USD in mid-2021 before experiencing a decline again in late 2022. This pattern indicates periods of both strong profitability and pronounced downturns, highlighting perhaps operational or market challenges in the latter periods.
- Net Sales
- Net sales generally exhibit an upward trajectory from about 3.36 billion USD to nearly 4.67 billion USD over the analyzed timeframe. While some quarters reflect slight declines or stagnation, the overall trend suggests growth in revenue, with occasional dips possibly linked to economic or industry-specific factors. Noteworthy is a drop during early 2020, which may be associated with broader market disruptions, followed by a recovery and continued growth through 2022.
- Net Profit Margin
- The net profit margin shows a pattern of gradual improvement from the low single digits near 6.5% to peaks exceeding 12% in late 2021. The margin then declines to under 8% towards the end of the period examined. This oscillation points to varying efficiency or cost management alongside revenue and income shifts. The peak margins align with periods of strong net income performance, while reduced margins correspond with lower income phases.
Overall, the data reveals a company experiencing dynamic financial shifts with growth in sales complemented by volatility in profitability. The interplay between rising revenues and fluctuating net margins suggests ongoing efforts to optimize operations amidst changing market conditions.
Return on Equity (ROE)
Parker-Hannifin Corp., ROE calculation (quarterly data)
| Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Net income attributable to common shareholders | 395,237) | 387,854) | 128,831) | 348,017) | 387,600) | 451,157) | 505,738) | 471,647) | 447,306) | 321,409) | 295,716) | 367,253) | 204,474) | 338,898) | 413,668) | 411,248) | 311,737) | 375,711) | 353,256) | 365,989) | 56,159) | 285,397) | |||||||
| Shareholders’ equity | 9,322,380) | 8,762,521) | 8,848,011) | 8,959,866) | 8,755,082) | 8,490,781) | 8,398,307) | 7,392,202) | 7,105,982) | 6,528,964) | 6,113,983) | 6,295,990) | 6,330,175) | 6,096,616) | 5,961,969) | 6,009,978) | 5,815,209) | 6,101,380) | 5,859,866) | 5,870,353) | 5,513,401) | 5,524,940) | |||||||
| Profitability Ratio | |||||||||||||||||||||||||||||
| ROE1 | 13.52% | 14.29% | 14.87% | 18.89% | 20.74% | 22.09% | 20.79% | 20.78% | 20.15% | 18.21% | 19.73% | 21.03% | 21.62% | 24.20% | 25.37% | 24.16% | 24.19% | 18.87% | 18.10% | 17.05% | 15.84% | 19.16% | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| ROE, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 45.85% | 39.18% | 42.25% | 47.28% | 42.96% | 38.07% | 39.37% | 30.90% | 26.09% | 20.73% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 15.10% | 14.72% | 14.45% | 14.26% | 14.12% | 13.35% | 13.06% | 12.95% | 12.23% | 9.54% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 30.77% | 27.72% | 0.62% | -18.56% | -12.75% | -12.20% | -16.17% | -0.11% | -7.29% | -9.82% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 31.52% | 30.89% | 29.74% | 30.36% | 28.96% | 28.58% | 29.85% | 30.67% | 27.73% | 25.71% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 76.41% | 58.97% | 61.86% | 49.05% | 41.16% | 62.10% | 57.62% | 62.90% | 109.51% | 110.16% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 7.67% | 7.61% | 7.16% | 6.36% | 6.34% | 5.79% | 5.29% | 4.65% | 3.07% | -3.74% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-K (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30).
1 Q2 2023 Calculation
ROE = 100
× (Net income attributable to common shareholdersQ2 2023
+ Net income attributable to common shareholdersQ1 2023
+ Net income attributable to common shareholdersQ4 2022
+ Net income attributable to common shareholdersQ3 2022)
÷ Shareholders’ equity
= 100 × (395,237 + 387,854 + 128,831 + 348,017)
÷ 9,322,380 = 13.52%
2 Click competitor name to see calculations.
The financial data over the analyzed quarters presents several notable trends regarding profitability and equity performance.
- Net Income Attributable to Common Shareholders
- The net income figures exhibit considerable variability across the observed periods. Starting from a notable value, there is a sharp decline in late 2017, followed by significant recovery and peaks in early to mid-2019. Subsequently, the income shows a downward movement during 2019 and into 2020, possibly impacted by external factors in that period. From late 2020 onwards, a general upward trend is evident until reaching another high in mid-2021. Thereafter, a decline resumes during 2021 and 2022, with some recovery signs at the end of 2022, although not returning to the prior peaks.
- Shareholders’ Equity
- Shareholders' equity shows a generally increasing trend throughout the entire period. Initial values around 5.5 billion USD rise steadily, with minor fluctuations, reaching over 9.3 billion USD by the end of 2022. This continuous growth in equity indicates sustained reinvestment and accumulation of retained earnings or capital injections, contributing to the company's financial stability and expansion capacity.
- Return on Equity (ROE)
- The ROE percentage illustrates fluctuations that correlate with the movements in net income and shareholders’ equity. From initial mid-to-high teens percentage, ROE climbs to peaks above 24% around 2018 and 2019, suggesting periods of enhanced profitability relative to equity. Following this peak, a gradual decline in ROE is observed through 2020 and into 2022, dropping to levels around 13-14%. This trend reflects diminishing efficiency in generating income from equity, potentially due to either reduced earnings or rapidly increasing equity base diluting returns.
In summary, the data reflects a company experiencing variable profitability with strong equity growth. While net income and ROE have shown cyclical highs and lows, the robust increase in shareholders’ equity implies a strengthening financial foundation. The declining ROE in recent periods suggests the need to monitor operational efficiency and earnings quality relative to equity invested.
Return on Assets (ROA)
Parker-Hannifin Corp., ROA calculation (quarterly data)
| Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||||||||
| Net income attributable to common shareholders | 395,237) | 387,854) | 128,831) | 348,017) | 387,600) | 451,157) | 505,738) | 471,647) | 447,306) | 321,409) | 295,716) | 367,253) | 204,474) | 338,898) | 413,668) | 411,248) | 311,737) | 375,711) | 353,256) | 365,989) | 56,159) | 285,397) | |||||||
| Total assets | 30,520,887) | 29,954,907) | 25,943,943) | 22,545,320) | 22,395,475) | 20,236,871) | 20,341,200) | 19,841,546) | 19,827,429) | 19,785,917) | 19,738,189) | 20,365,280) | 21,043,989) | 19,568,589) | 17,576,690) | 15,477,935) | 15,307,687) | 15,425,042) | 15,320,087) | 16,237,484) | 15,965,181) | 15,731,279) | |||||||
| Profitability Ratio | |||||||||||||||||||||||||||||
| ROA1 | 4.13% | 4.18% | 5.07% | 7.51% | 8.11% | 9.27% | 8.58% | 7.74% | 7.22% | 6.01% | 6.11% | 6.50% | 6.50% | 7.54% | 8.60% | 9.38% | 9.19% | 7.46% | 6.92% | 6.16% | 5.47% | 6.73% | |||||||
| Benchmarks | |||||||||||||||||||||||||||||
| ROA, Competitors2 | |||||||||||||||||||||||||||||
| Boeing Co. | -3.32% | -3.03% | -3.60% | -6.14% | -3.90% | -3.60% | -3.03% | -5.77% | -5.92% | -7.85% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Caterpillar Inc. | 9.79% | 8.50% | 8.18% | 9.11% | 8.33% | 7.90% | 7.84% | 6.37% | 5.37% | 4.26% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Eaton Corp. plc | 7.37% | 7.23% | 7.03% | 6.67% | 6.58% | 6.30% | 6.30% | 6.06% | 5.12% | 4.20% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| GE Aerospace | 5.89% | 5.33% | 0.12% | -3.23% | -2.38% | -2.48% | -3.28% | -0.02% | -1.03% | -1.34% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Honeywell International Inc. | 8.75% | 8.73% | 7.97% | 8.92% | 8.16% | 8.29% | 8.60% | 8.53% | 7.78% | 7.28% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| Lockheed Martin Corp. | 12.39% | 10.41% | 10.84% | 11.28% | 9.09% | 12.06% | 12.41% | 11.69% | 13.71% | 13.52% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
| RTX Corp. | 3.43% | 3.43% | 3.27% | 2.82% | 2.81% | 2.63% | 2.39% | 2.09% | 1.37% | -1.67% | — | — | — | — | — | — | — | — | — | — | — | — | |||||||
Based on: 10-Q (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-K (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-Q (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-K (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-Q (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-K (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-Q (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-K (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-Q (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-K (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-Q (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30).
1 Q2 2023 Calculation
ROA = 100
× (Net income attributable to common shareholdersQ2 2023
+ Net income attributable to common shareholdersQ1 2023
+ Net income attributable to common shareholdersQ4 2022
+ Net income attributable to common shareholdersQ3 2022)
÷ Total assets
= 100 × (395,237 + 387,854 + 128,831 + 348,017)
÷ 30,520,887 = 4.13%
2 Click competitor name to see calculations.
The company's financial performance, as reflected by net income attributable to common shareholders, demonstrates variability with an overall positive trajectory over several periods. Net income peaks notably in multiple quarters, reaching high points near the end of 2017 and again in 2019, with another series of elevated values observed from late 2020 through 2021. However, there is a marked decline in net income beginning in the final quarter of 2021 and continuing through much of 2022, indicating a period of reduced profitability.
Total assets show a general upward trend over the periods analyzed, increasing from approximately 15.7 billion US dollars in late 2017 to over 30.5 billion US dollars by the end of 2022. Although there is some fluctuation and occasional dips, the overall pattern is one of substantial growth in asset base, which suggests expansion or significant investment activity by the company during this time frame.
The return on assets (ROA) metric, representing efficiency in generating profit from assets, fluctuates moderately but displays a peak around 9.38% in early 2019. Following this, ROA declines to around 6% in 2020 but recovers somewhat in 2021 with values exceeding 8%. A notable decrease in ROA occurs during 2022, dropping below 5% by the year's end. This decline in profitability relative to asset size in 2022 aligns with the reduction in net income despite continued asset growth, suggesting challenges in leveraging assets to generate earnings efficiently during the most recent periods.
- Net Income
- Exhibited highs and lows with peak profitability in early 2019 and throughout 2021, followed by a pronounced downturn in 2022.
- Total Assets
- Consistently grew over the analyzed periods, tripling from approximately 15.7 billion to over 30.5 billion US dollars.
- Return on Assets (ROA)
- Peaked above 9% in 2019, showed a dip in 2020, increased again in 2021, and declined sharply below 5% in 2022, indicating a reduction in asset utilization effectiveness.