Parker Hannifin reported record second quarter sales, net income, earnings per diluted share and cash flow from operations.

For the second quarter of fiscal year 2008, which ended on December 31, 2007, sales were $2.8 billion, an increase of 12.7 percent from $2.5 billion in the same quarter a year ago. Net income increased 9.8 percent to $211.9 million from $193.0 million in the same quarter a year ago. Earnings per diluted share increased 12.8 percent to $1.23 as compared to $1.09 in the same quarter a year ago. Cash flow from operations was $473.6 million, or 8.4 percent of sales.

"Our company continues to perform very well within a challenging economic environment in North America. We attribute this to a number of factors, and chief among them is that we are consistently executing on the goals established within our Win Strategy," said Chairman, CEO and President Don Washkewicz. "Specifically, providing premier customer service is our primary goal, and our measures of customer service continue to demonstrate that we have the capability to ship quality products on time to customers all over the world. In addition, helping us to temper the softness in some industrial OEM markets is our global distribution network, with thousands of locations built over decades, which continues to be strong. The distribution channel, which accounts for nearly one-half of our industrial sales, provides Parker access to higher margin and less cyclical aftermarket sales."

"It is also clear that our effort to globalize our company is paying dividends," Washkewicz continued. "We are in a better position to maintain consistent profitable growth despite the strengths and weaknesses of key regions. Of our 12.7 percent sales growth this quarter, 4.9 percent was organic, 2.9 percent was the result of strategic acquisitions, and the remainder was from the effects of foreign currency exchange rates. We are especially pleased with our level of organic growth. Our focus on customer service, along with our capabilities to help customers improve the profitability of their business through the use of our technologies and systems, are leading to new and growing opportunities for Parker."

"Acquisitions remain an important part of our Win Strategy," continued Washkewicz. "Our strong cash flow allows us the opportunity to selectively add to our portfolio those technologies that have high growth profiles. We made four strategic acquisitions this quarter, adding approximately $223 million in sales. These acquisitions included electrical and production umbilical cables for subsea oil and gas installations; further expansion of our aerospace components and equipment capabilities; precision electro- pneumatic control systems; and temperature sensing protection equipment."

"Also notable is that our Industrial International segment again delivered particularly strong results in the quarter, as revenues and operating income in that segment grew by approximately 27.7 percent and 43.9 percent, respectively," added Washkewicz.

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