Parker Hannifin FY 3Q16 Earnings Call Notes

Parker-Hannifin’s (PH) Thomas L. Williams on Q3 2016 Results

Saw a moderation of declines

” So orders during the quarter sequentially got better as we saw January going through March, and obviously what we saw in April is consistent with the guidance that we gave you. As far as the markets go, I finish all my comment and will let Lee give you some deeper color, but I made the comment about that we saw a number of markets move from accelerating declined to decelerating declined. So I think the theme of what we are seeing is this moderation of decline and the movers from accelerating to decelerating have really lead to charge or distribution general industrial ag, mining and similar account and you asked for some of a positive markets”

Lee C. Banks

Oil companies appear to be restructuring to try to be profitable at $40

“The story around oil and gas, I guess major OEMs really continue to indicating no significant improvement until the end of calendar 2016 early 2017 and this is really massive and I’m sure you have covered this restructuring plans taking place. It looks like everybody is trying to restructure and look to be profitable around $40 per barrel.”

Inventories have normalized outside of oil and gas

“here is the consensus when I checked this not only from our guys and then I just go out and cal our contacts. If you are involved in oil and gas and you had a lot of OEM exposure, you are still sitting on a lot of inventory. If you get away from that inventory is pretty much normalized at this point in time. I think some of the guys may have gotten hit a little bit by some side effects from oil and gas, but that’s fairly normalized. I would say on OEM inventory where I still see this kind of construction equipment, mining markets especially Asia comes to mind. If you tour some of the equipment yards, I mean there is just excavators and wheel loaders that go on for miles so. But our North American distribution, I’m most comfortable that outside of oil and gas, it’s not a big issue.”