Record Quarter for Cemtrex, Parker-Hannifin and Other Industrial Equipment Companies

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Through Friday, February 20, almost 88 percent of the S&P 500 companies had reported earnings with the figures being relatively upbeat, albeit amid some lower expectations against the backdrop of plunging crude prices. Several companies in the industrial equipment and components sector were generally strong, including Parker-Hannifin Corporation PH topping expectations, smaller peers Graham Corp. GHM and Sun Hydraulics Corp. SNHY beating analyst estimates (on sales and profits and profits, respectively) and still smaller yet Cemtrex, Inc. CTEI extending its profitability streak to more than four straight years.

Cemtrex, a Farmingdale, New York-based diversified industrial technology company that manufactures a wide array of products, including emissions monitors and instruments, air filtration systems and custom circuit board assemblies, released results from the first quarter of fiscal 2015 showing a continued "streak of high growth." For the quarter ended December 31, 2014, net sales increased by 54% to $13.84 million from $9.0 million in the year prior quarter. For the same period, the company remained profitable, although earnings contracted to $396,872 from $416,552, with Cemtrex attributing the decrease to an unfavorable currency exchange rate and lower sales of electronics manufacturing services due to timing of shipments of in-house orders.

Sales of environmental products and systems accelerated 212% year-over-year to $7.34 million in the fiscal first quarter.

Culling quarterly filings with the SEC shows that Cemtrex indeed has streak going through the latest quarter. In fact, the company has now been profitable for 17 straight quarters going back to the quarter ended September 30, 2010. In fiscal 2014, ended September 30, 2014, Cemtrex reported revenue of $47.65 million, a 249% increase over $13.67 million in fiscal 2013. Profits for the latest fiscal year mushroomed 834% to $2.69 million, or 7 cents per share, compared to $288,497, or 1 cent per share, a year earlier.

Despite its record revenue and four-plus years of operating profitably, Cemtrex has a market capitalization of $19.5 million and is trading at a P/E ratio of only 3:1.

Parker-Hannifin, the sector's largest company by market capitalization ($17.6 billion), is a global giant in motion and control technologies. For the second quarter of fiscal 2015, Parker posted record Q2 revenue of $3.13 billion from $3.11 billion a year earlier, which was basically in line with Wall Street expectations. The Cleveland, Ohio-based company notched profits of $267.3 million during the quarter, up 6% from $253.4 million in Q2 fiscal 2014. On a per share basis, adjusted earnings jumped up 41.5% to $1.84 from $1.30, easily topping analysts expectations of $1.55 per share in profits.

The gains were paced by an 11% climb to 538.5 million in sales for the aerospace systems business and 5% rise in North American sales to $1.4 billion in the company's diversified industrial unit and offset by a 7% fall in international sales to $1.2 billion.

Parker bought back $817 million in shares during the quarter. With the strong showing, the company boosted its full-year earnings outlook from prior guidance between $7.20 and $7.80 per share to a range of $7.90 to $8.30 per share. Parker has a P/E ratio of 17:1.

Graham Corp. cruised by analyst expectations with third quarter fiscal 2015 sales (ended 12/31/2014) of $33.6 million, a surge of 44% from $23.4 million in the year earlier quarter. Net income tallied $4.0 million, or 39 cents per share, compared to $1.4 million, or 14 cents a share a year prior. Analysts were expecting sales of $32 million and profits of 32 cents per share.

The Batavia, New York-based firm manufactures and sells critical equipment for the oil refining, petrochemical, power and defense industries. Sales in the U.S. increased $3.8 million compared to Q3 fiscal 2014 to $18.3 million, while sales to the "other" geographic markets (those outside the U.S., Middle East and Asia) improved by $4.4 million year-over-year to $11.0 million. Sales were down in the Middle East and Asia by $1.3 million and $0.7 million, respectively.

Graham's board approved a doubling of the quarterly dividend to 8 cents per share and authorized an $18 million stock repurchase plan. Graham currently has a market capitalization of $222.8 million and trades at a P/E ratio of 17.5:1.

Sarasota, Florida-based Sun Hydraulics, a maker of screw-in hydraulic cartridge valves and manifolds for the global industrial and mobile markets, came up bit short against consensus revenue predictions in the fourth quarter ended December 27, 2014 at $54.8 million. Although up almost 12% from $49.1 million a year earlier, analysts were expecting $55.0 million in sales. Earnings for the quarter were $10.33 million, or 39 cents per share, up from $12.71 million, or 32 cents per share in the year earlier period. The profits nipped passed analyst estimates of 38 cents per share.

Compared to the full-year 2013, net sales rose 11% to 227.7 million. Net income climbed to $43.8 million, or $1.65 per share, from $38.0 million, or $1.45 per share, an improvement of 14% on a per share basis. Calling it "another record year for Sun," President and CEO Allen Carlson attributed the gains to expansion in all geographic markets, paced by 18% growth in North American demand. Sun shareholders of record on March 15 will receive a 9-cent-per-share cash dividend. The company currently has a market capitalization of $1.07 billion and a P/E ratio of 24:1.

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