Parker-Hannifin (PH) 2 May 242024 Q3 Earnings call transcript

Greetings. Welcome to Parker-Hannifin Corporation's Fiscal 2024 Third Quarter Earnings Conference Call and Webcast. [Operator Instructions] Please note that today's conference is being recorded. At this time, I'll now turn the conference over to Todd Leombruno, Chief Financial Officer. Ms. begin now may you your presentation. Leombruno,

Rob, you, and good everyone. day, Thank

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record quarter gold for a box As every in number Parker. company. highlighted the Once that QX was strong said, Jenny for QX is another again,

If X% did growth reached prior in from We you'll -- Organic divestitures. billion up That's see sales. from slight negative over X.X%. year. grow just $X.X we total impact just was positive, sales, slightly it's

not the terrible currency but a headwind headwind. been Our X.X%, first has sheer sales and currency this to time slight did it's the at shift quarter, a

at on We the XXX at points prior of did a an points margins, of adjusted at XXX That operating similar basis year. an improvement basis from look versus segment XX.X%. And year. EBITDA you finished that's We If XX.X%. finish margins. increase prior is story

$X.XX ROS XX% of That from increase And XX.X%. earnings and were year. an prior adjusted per of is that's Moving net net income. to generated share million $XXX We adjusted or a income. $X.XX,

an when segment look each produced we sales, you one you is really income quarter income Net income, net year. prior at when from that generated also year. XX% the solid of those earnings share, when was highest levels look and fiscal this the per at look a QX of increase just at you operating

So strong a very quarter.

dollars but If driver quarter. walk by we main can move or to X. We the the company, nearly Slide operating impressive was quarter. quarter. $XX a again our segment strength just Aerospace just across of but the EPS. growth for increase $X.XX EPS adjusted again, Systems XX% main million operating the $X.XX to Again, shows that performance in in say growth. the specifically, really of in This That of increased in glad That's mentioned EPS the the XX% accounted income the increasing. of this this, Jenny I'm segment contributor it's

[indiscernible] prior Interest is discretes versus our after you from expense items prior year, to the favorable really but year. a other Corporate really, predict. year. just not that of hard prior $X.XX a and favorable. to efforts are little higher result than the successful Simply, Tax is deleverage share again few higher certainly expense G&A transaction. was year bit of and That just just that's fiscal was that's year count were favorable this result see more repeating can a prior

has really the in the the year. theme So as first the half quarter remains it same of this

operating really generating a margin strong are team industrial top environment. performance tepid in that line Our is expansion, driving members

And efforts reducing are our our interest debt really paydown cost.

great the the this XX, just segment work it's If to is results. together to So go performance. those we see team generate to Slide

Margin positive a expansion dollars growth all to of continue see can That comp the the dollars great as year. we our to improve continue You against does see. Order in see tough across prior concentration higher result our of strong very in last of remain sequentially quarter. portfolio. businesses. from Order did a did is aerospace

So we're that. to happy see

points will volume really quarter, reached of North look American was throughout as at a down excellence by say but If transportation margins growth on is billion. continue the It that just even in line can $X.X expectations. in was markets XX.X% did businesses, to operation you continue the with softness decelerating in down the of did how increased off-highway it X.X%, We our record continue American slide, destocking but driven margins see Organic higher. and North I Despite the a you specifically. see was example quarter XXX and a This see to to business. the teams to rate. the drive shining basis at volume, third opportunities sales

X we again, minus volume line America remain They at North the If our move you that billion. international quarter. with down see businesses. with sales X.X% in in businesses, on in finished rates was guidance. Order growth those Organic reached the last constant $X.X can quarter. But was did to

markets. at negative in most you transportation contraction at highway EMEA, and implant and the was that just If X.X industrial some again look negative

Pac was remains generally X.X%. minus growth Asia China soft.

the had positive a remains versus and third billion, are delivered reached businesses a we XX% of What productivity for the also the aerospace on in we If in is company. points, businesses at record highest they was are we margins strong Sales business. international generated seeing another growth we EMEA, Pac that continue America lower in XX with and at Latin is we've on on even point. year. quarter to aerospace, segment we're In some the stellar XX.X%. that's team, these expanded have every at X. record while XX% volume, ever seeing aerospace. cost about aerospace really orders quarter by proud choppiness Asia be market minus look basis They of Focus prior $X.X improvements. some controls Organic improvements the orders, across a in

to of This Aftermarket the Aerospace. outstanding. continues within growth organic quarter be is double-digit fifth strength

fantastic, to continues aerospace and we This robust, XXX just aftermarket the prior continue XX. Demand record, is in ever basis in aftermarket margins commercial plus to XX% doing up new just great come reaching very in margins points remains quarter, higher. Order strength a versus year operating the are driving by at strong at be rates increasing area team XX.X%. and were

we XX, performance flow. across all to businesses. So talk our go just of let's great cash about Slide If

record. increase paying seen higher you think dividend an XX approved probably unbelievably So first our dollars the quarterly increase, That per that record a just does of annual most of years, a have impressive is increase XX share. payout year all, week, dividend I this Board per $X.XX dividend now to last over years prior our this of With from XX% payout. of

cash billion cash. of of record. that Looking XX% said already, prior versus it being year. a prior that's sales. operations, of increase but year. at When a sales got The $X.X cash a is that and increase flow. generators of from did XX% and flow really I great a great XX.X% That is you record it we deployers We've cash And on is focused XX.X% cash flow is to billion team free on flow, look $X.X at remains over also

We committed are of we over reaffirming of our and are of cash flow fiscal dollars billion, cash to free full free $X conversion year year. for flow full XXX the target over certainly

on performance cash. great So

on reduce debt move did we give Mega Let's XX. deleveraging by happy quarter. the quarters in over to to We was the closed X an our Since Slide just transaction, I'm million progress. it ago. update $XXX

down with billion. the of have net on debt of reduced continued are here, XX% now you coupled the slide And We That, commitment. is our since see over we adjusted and can close. reduced to just EBITDA X.Xx have growth, in leverage ahead debt X.Xx. is $X.X expansion our gross EBITDA debt original by by to over Both those the

in will We net year this by are billion and $X June in feel of paid fiscal we we track fiscal the of on down X this that certainly achieve debt leverage of just Xx to still months. year, confident get

to go Slide we on guidance. XX, some our if So just color

our earnings our We year. full are and expectations increasing growth reaffirming margin for midpoint per share year organic the and

to midpoint. sales XXX it be the points once are year And on we by growth, full the again. reported growth for organic Our expected to We're year. increasing basis is increasing at aerospace the for X% XX%

growth industrial forecasted remains company, the negative international to X.X% businesses. same is the and at year But growth now for organic positive. be full diversified X.X%. America North Organic Both

be points helping So prior XXX year. how margins. margin prior the can higher the now portfolio our on year to than raising full We're aerospace that We're you to is adjusted forces expansion basis versus segment XX.X. and that line. raising XX basis points guidance, see operating approximately top That's

based Corporate on prior guide. down little results. from rate really bit, is Tax G&A unchanged actual and just interest, a QX

plus and Full as-reported or narrowed to minus to increased expect there's are We has increased year EPS $XX.XX. fourth range to a adjusted and the Both the that midpoint be $XX.XX XX% year at quarter. EPS full $X.XX of now. those to has for

is the quarter, look EPS to you if fourth $X.XX Finally, at be adjusted midpoint. at expected the our

as now more and I'm in everyone it needed. I the to appendix hand going specifics if usual, ask we've XX. Jenny, to to some turn So Slide got you, back And to

to Thank the key few A 'XX. we year near close you, Todd. this as fiscal messages end our out of

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slide, please. Next

are our We Investor will Ross, President looking of be Todd Officer, story our to by our our and May Chief President investor Relations, I Operating Financial Vice Chief meeting Miller. Jeff forward Officer, Leombruno, sharing our at joined XX. on Andy and

again operational are today, turn it financial Todd you how for company, trends, Our to Q&A. back the joining key over the I'll excellence positioned from themes for and for the growth Thank transforming secular for performance. call and are meeting we

to we're Q&A, the first the open we'll take you ready and Rob, for lines got in queue. whatever

question first with the Our Davis is in Melius Research. queue today Scott

I got I'll to it questions, try bunch keep but it brief a pass and on. of

like. stuff are are M&A, bolt-on-ish to pipeline, right your guys at a deals what just more -- on Meggitt your what looks we kind at comfort thinking relates little it level more and we good looking this what mark-to-market what on forward type out Or are of there? of as you that there bit point? are type stepping are kind other now, Just And

to we of year. us. like and as earlier wish about, were always we various on some working targets are in the building was forecasting we're paying technologies there really than would. it has with the right bolt-ons, for to Meggitt, we're for accretive business. the fiscal talking of foremost, the we deals Meggitt margins, that and robust. of debt We're Well, this end we fit our about be this be committed secular the There and say, The right? it's to doing down, we at like Xx we that Really, really lot said be there there Parker, and growth, It one. be fit ones. a trends Scott, sure to right Listen, We're But follow by the I larger relationships. right -- out pipeline, pipeline making often is some first interconnected Todd sizes, have

pipeline, in that the we'll work that to to about have continue we more So future. and talk

sustainability? understand and and the double that guys their things we types you growth our manage I think generally that. numbers. how when rates Okay. they forward -- sure taking experience do inventory? are customer them profile smaller understand look up that. the on risk Aero they at a the least do in level of are so us inventory those inventory? And And help -- those manage you to how being that but issue, you Do about commercial more they big help is don't ordering Or and of just And aftermarket making at XX%, like perhaps

Scott. Yes, in I concerns question, of aerospace. ordering any heard a it's of haven't good double

long has orders. I out ordering. chain think but about supply I've times, there's there still everybody lead constraints heard their that nothing no, double There's

we As manufacturers through believe, will it's and to pre-COVID balance up be of traffic MRO, strong. this balance returning levels, continue air rates, ramping go to a I to higher different

see that we future, foreseeable the for So as strong.

-- specifically thing you in aftermarket But this, the of know the total Meggitt, is probably business. Scott. one our Scott, XX% quarter, aerospace business with

to it's up pre-COVID -- aftermarket combination So company. air expanded of the Jenny mentioned within And is the really back the it's traffic mix a numbers.

need out like there. on based some Yes. what to and replace read wheels Well, looks we brakes certainly they it

guys. luck good So

Our with from next Andrew the Bank of question of Obin America. line is

and a Just aero margins. on follow-up aerospace

over the spare You really over going know, guys XQ, high you of past the we emphasized But have from couple quarters, up onetime are onetime mix well? past mix what's sequentially guess, benefits XQ, so impact. I

actually actually -- the was about at QX were XX%. mix, mix [indiscernible]. Year-to-date, Well, talking just as was we're we aftermarket

got our excellent of is higher the of it growth we our in what it's we in to of a aftermarket areas. Department increase. from and And Also because growth partnerships private is adding been combination other big So public with what with Defense. military portfolio business had have braking the Meggitt, these we

lot going pleased portfolio technologies. a complementary of of well and positioned things So really this well, with

about positive going really the this So well future. into

Got you. question And America. a just on in orders North

trucks? you it's am and and just highlighted seeing think since on ag continue correct you rate. And saying that and much I a transportation, terms. just I of have and do where the you us used stationary A But visibility enough a decelerating are we because and just softness you mobile, could at lot can the mobile Class to highway I think bottom? you through what while mean, it's maybe been stock are you the But those how walk see do a

Okay.

Obviously, a guidance -- do just run-through I'll and our I'll because raised that. the So of we of aerospace is strong, little we've very know markets.

at negative Andrew. equipment, take and less that energy, negative negative. I construction that would say both America. you industrial ag Europe, Off-highway, single-digit And mid a are North more mid-single-digit in Europe primarily oil and again there. in negative, high positive. single-digit and Transportation, more gas, them Automotive of look down globally. is is negative, Implant If equally remains negative, low

quarter. in an just and and residential as prior through Again, were destocking time saw mainly slightly more negative, the it refrigeration, look double-digit negative, last business. it tough we It driven quite this Europe the was you a is distribution pretty still little some it's by we to destocking, When year, take There's improving. mentioning, commercial is is lingering negative. but improvement positive that HVAC a at comps

have look now. been today, a proud X.X% orders take we're Industrial quarters the North of we're company. still it, And for to we growth X where negative at still guiding when very America organic for at So

core an both would you portfolio, quarter as historically, orders average X for negative And total see that years. industrial Parker America. of And same North negative go went

So near quarters Backlog start, in be record levels. reflected they've off talked the And have I a before, and here. order here. have say what of April would would conditions strong. destocking we holding about And the we orders is that backlog a might also consistent remains as we've there, to guide, double really spoke big I at QX What are dollars been much pretty coverage past, are end while in as we difference better historically. in say seeing the to about

is question Evercore from next Our of the ISI. Raso with line David

implied geographically fourth maybe Can the cadence? And on any The for just organic to international, quarter from quarter. through or like there rate to declines you growth the of visibility however you weakening is when those lessen. start us us take sort help that third

Yes. Thank David. you,

So obviously, minus in orders went X. international from minus to in X QX

guide. the the transportation had So and definitely X the continued, the see expectations, had and is in and to a in in were slightly what that line in in at with QX still We driven it mentioning but negative for the -- the I have we orders what for industrial we down and year, are our sales a us in quarter year, as negative quarter X.X. are the has now earlier, that for is contraction Destocking take Europe. really softness indicators that reflected equipment. the off-highway in really Really, was macroeconomic just

the the of start seeing quarter. same not North America this that we're we're in thing at So seeing

So any eye close yet, there not but it. we're keeping turn signaling a on

for I you sort to in a I'm more sound North Okay. Maybe dampen April. maybe international suspect of North of the of America, sure quarters. address doesn't think get of if can -- sense positive couple you trying would America that you making turn kind organic I'm if what when, a just encouraged of if sort you little just could? a thought,

we just It's Usually, historically, right? choppy. see over has North choppy quarters. quarters, then has the really the been And turn, America, average been been -- international last several and X it's a

update what on that to keep have a point We're So close you America. next it's we'll to eye it, to for at call and going follow quarter. would have just hard better a North

lastly, that's on And us hop I'll cost. you And Can price update an then give how trending? off.

Yes.

We're So we're twice call year our price a a pricing normal back we to environment. what doing would increases.

went that good reminder a good I out has team still job. often. and done sticky. our job early margin inflation believe price And price, The As to with We a we've done neutrality. really We think out at a we have maintaining be there.

right now. to back more we're environment So of a normal

next Our with of line Joe Sachs. Goldman the from question Ritchie is

America. end helpful And little that so just getting lots were the that turn North maybe questions, of bit is and April to a on obviously, hear towards so curious, I'm we're And destocking. really in of the better we

that the we've -- is Just And distributors, what now and how with you things do like think your asking will just you quarters. inflection curious like be been this conversations could actually specifically what like low we've potential destocking several given slow I'm work? feel for this are seen

around would be comment really that any helpful. Just

slow They've tell of able would climb. But of this participate bottom. for that this some It's just now, move just I projects. tell in been quarters us a what wouldn't looking some sharing been CapEx in some a or days early might have positive Well, reinvestment on work some a in nice sentiment. really maybe point, positive right? seeing of is to these early you they've you some with be distributors steep like indicating factories, it's how quarter. seeing really at a It's I been mega the with we kind couple we're

even Like hear. -- guess through of Okay. kind of well. that's industrial as have business at great you really guys No, around international done also expanding I the Yes. a good margins questions the thinking -- from the to job just do when maybe international of we're how to feel margin curious about business slower just like it's trajectory negative. if business, have pick in been things if time I'm the that a volumes haven't here? you up

the margins. just we're Win margins. and quarters, never of waiting might cost or pull. for teams, done job practitioners know a or looking the levers and their with the as of lot strategy, recession teams. mean in making in in several confidence a These they've mentioned anything a expanding never sure earlier, that they commented past, this at downturn control a to have happen. last We've expand what we environment these We're constantly for I that I great I

is Our Jamie of the Truist line from Cook with next question Securities.

on from brought I'm just good. I across to whatever pretty balance wondering or To organic of you which have just organic just industrial Jenny, portfolio. Parker-Hannifin you is the a for companies the to margins more a at Congratulations I'm your degree on nice you're we just at, thinking, quarter. Analyst assuming do guess, get look which margins on to having year, most to ability improve sort the this Day. XX.X% put if a ceiling in implied sort much growth. at XX% igniting the your for -- targeted your I'm if the growth what were as margins margins, already have here focused margin of you your guys for will address total But

And after then -- don't to do think again. would is positive in I'll a second question you you more ability the Do back question, portfolio. I my then we have M&A would is have sort a mean, that you industrials to strategy? you been weaker. and aerospace the giving guys. queue second Meggitt but businesses, obviously, guess, just to back I get has question of to, you to, that. as organically need my the or And guys for big Longer Thanks more long grow you business balanced late-cycle consider cycle

Jamie. Thanks,

secular and intended margins. grow on at stay some the pun our with a margin going in margin you together just investor But here we're the focused to in We on ability for have feel we're And first the limits So We're lot that no weeks. right our portfolio one updates not meeting feel to very would other. a of accretive I few of teams question, I a say need us your this we about mentioned or now runway, strategy done. expansion as more pulling longer earlier, be. to does growing We of there's lot acquisition trends. aerospace And EPS, like a that strongly margins, Win that this really all, more achieved. have of what in to technologies. we're expansion business, for and differently expand we'll be still the mix X.X, Strategy to not needs opportunity organically. proud complementary growth, top It . On line accretive to to cycle that with or

with of the have encompassed been those of that is done so that acquisitions believe we've All things I we've that the and couple of one reasons last successful them.

think of of these a there's of kind talk number obviously real X for. the like that's that's more aerospace being most at of We So these interconnected and our looking power time. customers we the business, buying We in technologies business and together, or percentage our why we often of like about them being technologies. we're aerospace. No magic on all a but

Our Stifel. is next Nathan question with of from Jones line the

expected the questions improvement I on of the some on guess those of in short term. a bit order and the follow-up a rates in

downturn the well. in industrial as by been shallow relatively historical this businesses Parker for I has a think standards,

expectations was as on recovery well, your or I shape given interested just commentary it been shallow your you the when just how just So on in of of maybe or downturn, envision a that that like comes. recovery lead the kind should what to relatively looks that it's upturn shallow

Yes.

have lead because time changed business part I shallow do the to We portfolio. business of terms, in longer think your it's our we've we're obviously, than -- the industrial use past, the been today.

We have higher aftermarket with CLARCOR.

those belongs a some aerospace we it business We segment, where that reminder, Lord. to And lead have groups. business the have with sits those in industrial longer technologies as time some in of

the not think been in as it reason as as is I portfolio has that deep past. the So maybe the it's

that's to secular how with trends grow there the Going but the that projects way of hard differently. some forward, move, with we going do to these believe going to out it's say we're I like are that

just the but might and finally if today real looks with seeing be everybody to -- it's that slow an spikes, this today you no indication And quarter to really end some for of the wanted be So steady destocking. better. to we lingering start share on going or seeing

be down of XX basis margin margins up say. revenue, in couple questions or on decline good margin strong to a margins. points very on would margins America revenue. on a points international A X% up That Obviously, is any on North performance. question And XXX

expecting we growth return the end As in to here, this kind we down margins incremental cycle return industrial growth? be envision businesses destocking as should what to of to the those you and see

you're going see that But you've that's that, us. good that's think to us. think in . target I I that going outperform number. seen incrementals number past. the XX%. a seen forward, But us the for for good a you've still think normal We We

Our of question Julian from the Mitchell Barclays. next with is line

apologies, America. did the top but that's if end wanted of intake, really order North like to just around it color, fourth DI for in take Maybe the an may organic the okay. America point time you down And revisit sales assumption sort was to line just of seems your nearing be more I sort relating quarter one destocking it North

in X-quarter decline only fact really revenue you, behind X-quarter that is region. decline you've but you had that had the orders that behind reflecting a a you've So

wrong orders the longevity about And means several around than with downturn the quarters the answer, with it? revenue we should commensurate shorter a that's there's think decline something right the moving that downturn? revenue should the orders so that the Or decline. have no, to we backlog of expect much way Is of

than the finished What expecting that we were not to that QX. April month we're look way things Julian, just like really signal trying Yes, to that. better the we was to in linger of

in for lingering North there's growth no, negative no America. expectation So long

Understood. the sort industrial way, just question, at on in look perhaps technology second to And basis. would then trying revenue my be another of platforms

there's around, them sort down But in and forth. lag. or it you and side, control engineered sort sort we the flattish materials. flow happened So back think, hold can in follow platforms that the declines with process filtration a on than does saw I single-digit so what in materials there do I high and then filtration moving think of and just tech in realize X Motion up different other and better of and industrial that, quarter geographically parts engineered in and the of

could Julian, motion we and believe We process, and out. [indiscernible] platform, that that distribution systems pointing do process those the highest should grow are differently businesses, those those sales. the most the businesses levered -- do plan thanks and motion of distribution systems the for than to percentage network,

bit destocking the end. cycle the last over nearing heavy quarters kind then We in business, that's end some think of a little more already that, and space. mentioned engineered longer filtration, of aftermarket, do markets an seen but in transportation it, continue that automotive markets. both Jenny couple of materials, You've the

in we So industrial it industrial what's orders. company a has help that even positive, organic you market global the less why to look strategy And differently last the kind negative matter the that's of over perform the downturn on no years the think post as over last back could differently. months, order been supports XX many perform in of many, if our growth to that's going in shallow, light why been we've some able I

our shaping the part of it's of think portfolio. I So

tools -- mean expand using of X.X% the these expand it's doing across margins portfolio a the is teams more XXX I reason margins. job to points. organic It's why the resilient. Yes. the basis we And great growth, with can businesses are all

said team. whole the guess really before, I proud -- it's of . we're So

the questions Next Mig Dobre from line with Baird. are of

the [indiscernible] at about want in we this with experience quarters what's been than had seen that business OEMs. of going demand. the cycle if how process and curious destocking I of synchronized. the earlier the that also earlier be lower where started occur sort X if past down sort you've talk OEM you we're in of that's The think kind longer the you seems distributor a somehow implies see more there. production demand that when really to cycle, quarters, distributor I'm cuts. just and X industrial well. while could than wondering to And orders for down starting to me were and on as maybe traditional the versus X distributors now look It actually shallower, things is I'm or bit that the it your OE little last maybe you about

talked as placing But nobody big dealer we've them, And great that inventory, the there's canceling when orders pushing destocking own would I or as many any they're out higher we high, their for not to extent. of you, saw so inventories past. But OEs, earlier they orders dealer as I of that's are in think of seen pushing the right? they had would say them I though, start tell about distribution. a destocking do with kind large sense our

signs is seeing that feel don't going longer. any to are I We're So right last that now. this like telling us not

looks Just the here it signs that QX it early than different has.

really we mix the mix that that still that talk remains in the Industrial XX-XX about segment. Mig, same,

there's think nice we there. balance So a

capital if on of about there curious be Day, deployment something comment the this -- there core couple portfolio and And I'm past at is maybe outside years. to but you've the -- as evaluating your is targeting been sort you'll M&A of upcoming on Investor expanding of said the Okay. portfolio that over you're areas

strategy expansive more that you're are if in the So still or you've that to build. of areas lanes active been the looking sort

Right now, outside I of looking would technologies you that expand we not we're have. the to tell

set They of a As think really ones like of the them, technologies. to portfolio. we a for commented . they're times I've connectivity externally, we have couple our and right this

questions is Research Our next with Jeffrey Partners. Sprague from line of Vertical the

is until right, given right? I growth, Jenny? and focused phrase look brought question, But all interesting we've X quarters kind bit North people a I And my way more guess little hyper hyper growth other little to going like quarter, even you on recoupled. like with orders, you Sales the for looks we're can be focused what at America, rhythms it may it this of a has it couple tell I outpaced of when order a think, up. I'm

be much the some tightly sales correlated that might be. are mentioned we as going should try here more upturn to where orders but backlog, thinking be to and really glean we You

that so, I don't I Jeff. No, thinking think way. don't think we should be

different that, of a to go think XX And we that. years change was it ago, this the the backlog the the ago, of strength It's believe in years if right? the back X because that company was once It's than really I going differently I portfolio. it than again, grow to past. turns, in different we're and

industrial these Jeff, would come go demand off a every did years had deliver Yes. significant bit organic through there that we right? X of amount to different. I through obviously, we We things add, double-digit one is of growth, was of So businesses. those a little

you've all-time if the levels. inventory year, levels think But the backlog moderate thing. at reduced seen as pretty of I throughout that we've kind said, that really Jenny strong. It's near

make pressure sure to that legitimate. continue test that real and to it's We

think I cycle a portfolio. mix of having longer just that it's part within

you then can here, of up tick X and numbers the the commercial were through if we handy, those XX, aero And the Great. just what OE, just have kind quarter? and aftermarket aftermarket but you the got numbers military OE in buckets

Jeff, QX, For you're asking?

Yes, for QX.

XX%. military we've Their up was OEM OEM recovery, things mainly traffic wide-body MRO XX%, narrow X% MRO strong XX%. Commercial about, was up and thing. Yes. talked on and growth. that same And based

this just all Jeff, . I that's would remind point, organic too. at everyone,

Yes. you, all Todd, organic. Thank

Joe line Wells Our next Fargo. with O'Dea from of the question is

decline with stick little And through North you, like of bore over mean, than to certainly I encouraging guess the seen what's XQ what to sequential looks relates I a from it mean, cycle of as a of commentary just it larger wanted number I kind of but to Sorry COVID. years around, get the implied common demand. and last outside America for color revenue on theme. to kind we've XQ, fourth I'll quarter,

there? kind just stable so were like from to seemed what The And XQ XQ. orders you're of anticipating sequentially, they

up. to dollars I think think you said you -- from said XQ I XQ,

softer even things there a trend little it just improving. otherwise, so And what's sounds are and holding because kind of sequential like bit maybe driving

Yes.

So guide the in with -- right, look QX are earlier, and they as you mentioned QX. stay the are order X, is they at at dollars QX based dollars, did you negative off of I if rates, line but sales

minus had that why that's So the approximately X versus previously. minus we're we that signaling X

Got it.

to distributor And sensitivity walks -- just want typically into a buy and That's kind terms versus much between of understand customer I are product? the much a in what kind goes to mean trying then of of pricing customer they Parker is and helpful. just when a question Okay. in -- predetermined to knowing loyal. and Just is on at they of they walking experience. prices understand are and brand exactly of kind shopping competitors? price Parker and shopping how how Or kind looking

Yes.

a part, exactly if the brand then and shopping, to as get help is very not it's they looking they person And them availability. Parker don't what First part I that Parker how And standing it's apply counter of would an having a need is products part who they they people for they order. Parker behind what replacement to and into know what now, strong the that the knows know exactly walk or it all, they how don't right need think price distributor. I So are when characterize need right?

to is of so get team, the they just with an really and special distributors. product. that service our They're value and that to in what customers. a have walking we partnership they're great a and So is provide many help they're to about And walking in extension get our engineering

question is TD Our Giordano line Joe Cowen. of next from with the

build there to dynamic at what to shipping inventories suppliers but is they're risk shipping side, like that's supply point rates on are very Boeing like must commercial, the to I there? chains. On But is doesn't what's know happening, over we rates aerospace the they've But reduction any that so and there, of anywhere given OEM the -- just everyone their down, be you aerospace given of still broad. like in going like where narrow if given you're them like kind do down all and your in portfolio told slow is it building with what into same sound see

We manufacturers aerospace team and stay our with No. talks Boeing in to a the all regular the airframe team basis. close on contact

are their going at right what we what we're to to committed the them them most they've the about is with in to seeing continue pace are with -- and So They goals. that consistent make help sure happen that rate signaled product to that recently, we now. we reach But XXs. talked have them supply increase production isn't

So right we're down that's now. slowing signs not seeing of any

aftermarket talked the OEM that versus about but think aerospace in we it's XX-XX if nearly too, Joe, about you it, business. mix,

helpful well. as that's So

Yes, for sure.

accept falling into to where of is the customers Just guess I you things you up a like last inflation on how going price, you're cycle? we about some ability price down. to situation you like back situation kind they to or get here. is again, going than is that either think did have mentioned consistently If figure, willingness rising tough more something inflation normalized to do your copper, extent same

things is Well, stronger at really I looking our how pricing And strong. years of I of is the muscle we've pricing even couple one talked that team, the our total these of think cost got inflation. about think during we last

back based would that in material, all come them levels pricing aren't right? a conversations, things not is had hit easy all we on know have at and need It's They're out earlier, more they're again, conversations to we just we if it's to it. those would. because normal sticky just when still but extraordinary mentioned would I cross as environment, But believe it's while data. inflation we So that of once. facts, their those you that bridge we there. And I based on we're And

is Our line Linzey with the question from Mizuho. Brett of next

business on charges. First realignment is question

'XX So to from any million costs just $XX $XX is lower, expectation it looks it million. to timing glean some Or dropped there? perhaps Is there? like Anything projects? to the achieve moving thoughts on there

maybe a of getting bit at just more timing as I little tweak. cost would minor those Yes. anything, done call well. a of than It's a some lower it

based [indiscernible] had we the the of it team. updated we from kind So just on

on price, like some of behavior the disclose then And on actual on it those and just don't industrial pricing, Asia? regions I'm just more in both Okay. know was any you Great. competitive price And positive or challenged segments. but Europe I curious

comment We you're we often. exact price. No, don't the mentioned earlier, and out as early I went right. on And

where last maintains stand to that's years, and it that's on our in through today margin we've protected neutral gone that the sure everything So we couple price. make going of with

and back, in went not we're gone back inflationary if asking Jenny rolling down. I up, have about that, those mentioned that done still you're price mean a that we've lot an Yes. right? costs environment of not

don't if need We So the that's we our has it got do feel kind where We we've very randomly. it been. more we to much question do . We've somebody. here when tied got price. process one to time and of for

next Nigel Research. be question will Our from line of with Coe Wolfe

North things the [indiscernible] coming question customers, feels So that in aren't is in the of could on-highway even let's necessarily where spirit you again. America, Maybe just April, trends. to back it the you're better. like in And the hone seeing your improving the and getting off-highway

be are you are And improvement trends? on which degree of we seeing a groups curious still move to I'd Or of seeing negative see So we there? similar over pockets if do Europe, pretty customer that improvement? then do we

Nigel, mainly April not see here. where be turn North are about it's April. Europe mainly say, really seeing into I would I is we're Asia, in there's or specifics. point, say go But any markets in see I want detail this in I No, that it an that seeing quite destocking say and to better where or to might North on don't nothing just it we're but to that at a the comments -- America, positive we'll that would commenting America, coming end this how is

really switching Yes, is over come down SG&A then some point, it's margin I got And productivity suppose. impressive. to and to at

SG&A in this at quarter. I think underlying came XX.X%

zone. that going of going really. like full this Is you're this there Or is anything So of you Is forward? think I sort to you in sort think range a maintain year, -- SG&A we're that's sales Do for sort XX% range right at that the can point? discretionary controlling XX% the question, the of good forward?

Nigel, thanks recognizing that. for

best But assessing remains team levels. are The I making holding of Quite expenses constantly being We we've when the that we right? making record have think extremely we do levels say high, investments business. at level right? to I on sales that ourselves better. overall the and wouldn't [indiscernible] been the it can on, sure the business SG&A anything mean comes always we there's frugal our we're off honestly, in hold to

So to can better comes SG&A, no do we there's think when we it doubt.

I we think that's all time for. have

for today. I thank want So everyone us joining to

and Miller, will of of anyone Jeff usual, As any Director Yan Investor Huo, VP needs our if available Relations; Investor follow-ups. be Relations, our

interest. attention always, As we your appreciate and your time, your

So great I this webcast, day. our 'XX everyone concludes QX and wish a release FY earnings

concluded. conference and Today's you. Thank webcast has

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