Business Analysis of Parker Hannifin

 Analyze Historical Performance, Strategic Priorities, And Business Improvement Opportunities of Parker Hannifin

PARKER HANNIFIN

Business Overview

Parker-Hannifin Corporation manufactures and sells motion and control technologies and systems for various mobile, industrial, and aerospace markets worldwide. The company operates in two segments, Diversified Industrial and Aerospace Systems. The Diversified Industrial segment provides static and dynamic sealing devices; filters, systems, and diagnostics solutions to monitor and remove contaminants from fuel, air, oil, water, and other liquids and gases; connectors, which control, transmit, and contain fluid; hydraulic, pneumatic, and electromechanical components and systems for builders and users of industrial and mobile machinery and equipment; and critical flow components for process instrumentation, healthcare, and ultra-high-purity applications, as well as components for use in refrigeration and air conditioning systems, and in fluid control applications for processing, fuel dispensing, beverage dispensing, and mobile emissions. This segment sells its products to original equipment manufacturers and their replacement markets in manufacturing, packaging, processing, transportation, mobile construction, refrigeration and air conditioning, agricultural, and military machinery and equipment industries. The Aerospace Systems segment offers products for use in commercial and military airframe and engine programs, including control actuation systems and components, engine systems and components, fluid conveyance systems and components, fuel systems and components, fuel tank inserting systems, hydraulic systems and components, lubrication components, pneumatic control components, power conditioning and management systems, thermal management products, and wheels and brakes. This segment markets its products directly to original equipment manufacturers and end users. The company markets its products through direct-sales employees, independent distributors, and sales representatives. Parker-Hannifin Corporation was founded in 1918 and is headquartered in Cleveland, Ohio.

Parker Hannifin

Parker Hannifin


R&P Rank: 255
Sector: Industrial Goods & Services
Industry:Industrial Machinery
H.Q Location:Ohio
Website: www.parker.com
Company Address:
6035 PARKLAND BOULEVARD, CLEVELAND OH 44124-4141
Ph:216-896-3000

Business Analysis of Parker Hannifin

The Industrial Goods & Services Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Parker Hannifin compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Parker Hannifin to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.

Here is the performance snapshot of Parker Hannifin with an interactive chart.

  1. Revenue Growth: Parker Hannifin reported a revenue growth of -10.6% year-on-year during 2016. Industrial Machinery Industry grew at -3.7% in the same period
  2. COGS share of Revenues: As a percentage of revenue, Parker Hannifin spent 77.7% of its total revenues on COGS. Industrial Machinery industry average (COGS share of revenue) in the same period was 67.3%
  3. R&D share of Revenues: Parker Hannifin R&D share of Revenues details are not available because either company does not share the data or we do not have it
  4. SG&A share of Revenues: As a percentage of revenue, Parker Hannifin spent 12.0% of its total revenues on Sales, Marketing, and General Administration (SG&A). Industrial Machinery industry average SG&A spending in the same period was 20.4%
  5. Inventory share of Revenues: As a percentage of revenue, Parker Hannifin spent 10.3% of its total revenues on Inventories. Industrial Machinery industry average Inventory spending in the same period was 14.0%
  6. Accounts Payable share of Revenues: As a percentage of revenue, Parker Hannifin invested 9.1% of its total revenues on Accounts Payable (A/P) Industrial Machinery industry average Accounts Payable investment in the same period was 9.4%
  7. Accounts Receivable share of Revenues: As a percentage of revenue, Parker Hannifin invested 16.1% of its total revenues on Accounts Receivable (A/R). Industrial Machinery industry average Accounts Receivable investment in the same period was 16.2%
  8. PP&E share of Revenues: As a percentage of revenue, Parker Hannifin invested 13.8% of its total revenues on Property, Plants, and Equipments (PP&E). Industrial Machinery industry average PPE investment in the same period was 15.0%
  9. Intangibles share of Revenues: As a percentage of revenue, Parker Hannifin invested 33.7% of its total revenues on Intangibles. Industrial Machinery industry average Intangibles investment in the same period was 46.7%
  10. Net Margins: Parker Hannifin Net Margins in the year 2016 were 7.1%. Industrial Machinery industry average Net Margins in the same period were 4.7%

Sector and Industry Association of Parker Hannifin

For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries. For high-level analysis purposes, related/similar sectors are grouped into sector groups.

Parker Hannifin is associated with Industrials Sector Group, Industrial Goods & Services Sector, and Industrial Machinery Industry.

Industrial Goods & Services sector is comprised of the following industries: Industrial Conglomerates; Industrial Machinery; Electrical Components & Equipment; Electronic Equipment & Parts; Containers & Packaging. The definitions for each of the industries is as follows:

  • Industrial Conglomerates industry includes Industrial companies engaged in three or more classes of business within the Industrial industry that differ substantially from each other.
  • Industrial Machinery industry includes designers, manufacturers, distributors and installers of industrial machinery and factory equipment, such as machine tools, lathes, presses and assembly line equipment. It also includes makers of pollution control equipment, castings, pressings, welded shapes, structural steelwork, compressors, pumps, bearings, elevators and escalators.
  • Electrical Components & Equipment industry consists of manufacturers and distributors of electrical parts for finished products, such as printed circuit boards for radios, televisions and other consumer electronics. It also includes makers of cables, wires, ceramics, transistors, electric adapters, fuel cells and security cameras. Manufacturers of Electric motors and generators and mechanical motion control products are also part of this industry.
  • Electronic Equipment & Parts industry includes companies offering Manufacturing and Design services for Engineered Components and Products used in different industries. Companies providing Laser-based manufacturing products are part of this industry.
  • Containers & Packaging industry includes producers and distributors of cardboard, bags, boxes, cans, drums, bottles, jars and glass used for packaging. Specialty Packaging Products and Pressure-Sensitive Materials producers are also part of this industry.

Industry Ranking of Parker Hannifin

With $11.4 billion revenues, Parker Hannifin ranked number 2 of all the companies in the US Industrial Machinery industry. There were a total of 92 public companies in the US Industrial Machinery industry that had revenues greater than $50 million during 2016.

The top-10 companies in the US Industrial Machinery industry by revenues during 2016 were:

  1. Stanley Black & Decker ($11.4 billion)
  2. Parker Hannifin ($11.4 billion)
  3. W. W. Grainger ($10.1 billion)
  4. AGCO ($7.4 billion)
  5. WESCO International ($7.3 billion)
  6. Dover ($6.8 billion)
  7. Fortive ($6.2 billion)
  8. Pentair ($4.9 billion)
  9. Flowserve ($4 billion)
  10. Xylem ($3.8 billion)

Business Model Analysis (BMA) Framework

We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.

Next Steps

  • Conduct a holistic benchmarking; to identify and target additional sources of value
  • Get in touch with us to learn more about Business Model Analysis Framework
  • Get free data, charts, and analysis of Parker Hannifinand its peers on select key performance indicators by clicking the reports provided below

Industry Peers and Competitors of parker-hannifin

Stanley Black & Decker (SWK) Business Analysis – Analyze Historical Performance,...

Stanley Black & Decker, Inc. with $11 billion revenues in the year 2016 was the number 1 Industrial Machinery company. Read this report to know the top competitors of Stanley Black & Decker and identify growth and cost optimization opportunities of Stanley Black & Decker

W. W. Grainger (GWW) Business Analysis – Analyze Historical Performance, Strategic...

Grainger W W Inc with $10 billion revenues in the year 2016 was the number 3 Industrial Machinery company. Read this report to know the top competitors of W. W. Grainger and identify growth and cost optimization opportunities of W. W. Grainger

AGCO (AGCO) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

AGCO Corp with $7 billion revenues in the year 2016 was the number 4 Industrial Machinery company. Read this report to know the top competitors of AGCO and identify growth and cost optimization opportunities of AGCO

WESCO International (WCC) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

WESCO International Inc with $7 billion revenues in the year 2016 was the number 5 Industrial Machinery company. Read this report to know the top competitors of WESCO International and identify growth and cost optimization opportunities of WESCO International

Dover (DOV) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Dover Corp with $7 billion revenues in the year 2016 was the number 6 Industrial Machinery company. Read this report to know the top competitors of Dover and identify growth and cost optimization opportunities of Dover

Fortive (FTV) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Fortive Corp with $6 billion revenues in the year 2016 was the number 7 Industrial Machinery company. Read this report to know the top competitors of Fortive and identify growth and cost optimization opportunities of Fortive

Revenues Analysis

Parker Hannifin (PH) Revenues And Revenue Growth From 2012 To 2016

This report provides the last five years revenues and revenue growth of Parker Hannifin Corp (PH) from 2012 to 2016. Parker Hannifin generated a total of $11.4 billion revenues during 2016. Parker Hannifin reported a revenue growth of -10.6% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in June.

Parker Hannifin (PH) Revenues And Revenue Growth From 2002 To 2016

This report provides the last fifteen years revenues and revenue growth of Parker Hannifin Corp (PH) from 2002 to 2016. Parker Hannifin generated a total of $11.4 billion revenues during 2016. Parker Hannifin reported a revenue growth of -10.6% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in June.

Parker Hannifin (PH) Revenue Growth Comparison With Industry Growth From 2012...

This report provides a comparison of Parker Hannifin Corp (PH) revenue growth with Industrial Machinery industry growth during the last five years from 2012 to 2016. Parker Hannifin reported a revenue growth of -10.6% year-over-year during 2016. The Industrial Machinery industry growth was -3.7% year-over-year during 2016. Parker Hannifin growth was slower than the industry during 2016.