PH · Earnings call · 2026Q2T · Full report
Liquidity and Debt Position
Parker-Hannifin Corp · 2026-08-06 · Importance 57 · Surprise 32 · In source text
Parker reduced debt by $1 billion during the fourth quarter despite nearly $15 billion of fiscal 2026 capital deployment actions. Net debt to adjusted EBITDA declined to 1.4x from 1.7x a year earlier. Fiscal 2027 interest expense is guided at approximately $340 million, excluding potential debt incurred when Filtration Group and CIRCOR close. Management expects the two acquisitions to increase leverage to approximately three times and require about six quarters to return leverage to approximately two times.
Key facts
- Lower interest expense in FY '27 guidance adds about $0.38 to EPS
- FY '27 corporate G&A expected to be about $200 million
- FY '27 interest expense expected about $340 million, excluding any pending debt for Filtration/CIRCOR
- FY '27 other expense forecasted around $100 million
- Reduced debt by $1 billion in the quarter; net debt to adjusted EBITDA of 1.4x, down from 1.7x a year ago
- Corporate G&A and other contributed $0.25 to EPS growth in the quarter due to favorable foreign currency exchange
- Lower interest expense added $0.02 to the quarter's EPS
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| net_income | positive | committed | — | Lower interest expense in FY '27 guidance adds about $0.38 to EPS |
| operating_income | negative | committed | — | FY '27 corporate G&A expected to be about $200 million |
| net_income | negative | committed | — | FY '27 interest expense expected about $340 million, excluding any pending debt for Filtration/CIRCOR |
| net_income | negative | committed | — | FY '27 other expense forecasted around $100 million |