8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): October 16, 2008

PARKER-HANNIFIN CORPORATION

(Exact Name of Registrant as Specified in Charter)

Ohio	1-4982	34-0451060
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

6035 Parkland Blvd. Cleveland, Ohio	44124-4141
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (216) 896-3000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

Item 7.01 Regulation FD Disclosure

The following information is furnished pursuant to Item 2.02, “Results of Operations and Financial Condition” and Item 7.01, “Regulation FD Disclosure”

On October 16, 2008, Parker-Hannifin Corporation issued a press release and presented a Webcast announcing earnings for the quarter ended September 30, 2008. The press release contains references to sales growth excluding the effects of acquisitions and foreign currency exchange rates. The effects of acquisitions and foreign currency exchange rates are removed to allow investors and the company to meaningfully evaluate changes in sales on a comparable basis from period to period. A copy of the press release is filed as Exhibit 99.1 to this report. A copy of the Webcast presentation is filed as Exhibit 99.2 to this report.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits:

99.1	Press release issued by Parker-Hannifin Corporation, dated October 16, 2008.
99.2	Webcast presentation by Parker-Hannifin Corporation, dated October 16, 2008.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

PARKER-HANNIFIN CORPORATION
By:	/s/ Timothy K. Pistell
	Timothy K. Pistell
	Executive Vice President - Finance and Administration and Chief Financial Officer

Date: October 16, 2008

EX-99.1

Exhibit 99.1

For Release:	Immediately
Contact:	Media –
	Christopher M. Farage - Vice President, Corp. Communications	216/896-2750
	cfarage@parker.com
	Financial Analysts –
	Pamela Huggins, Vice President - Treasurer	216/896-2240
	phuggins@parker.com

Stock Symbol: PH – NYSE

Parker Reports Record First Quarter Sales, Net Income, Earnings Per Diluted Share and Cash Flow from Operations

CLEVELAND, October 16, 2008 – Parker Hannifin (NYSE: PH), the world leader in motion and control technologies, today reported record first quarter sales, net income, earnings per diluted share and cash flow from operations for the quarter ending September 30, 2008.

Fiscal 2009 first quarter sales were $3.1 billion, an increase of 10.0 percent from $2.8 billion in the same quarter a year ago. Net income increased 9.0 percent to $250.2 million from $229.6 million in the first quarter of fiscal 2008. Earnings per diluted share increased 13.1 percent to $1.50 compared with $1.33 in last year’s first quarter. Cash flow from operations was $307.3 million, or 10.0 percent of sales.

“Current quarter results reflect our ability to deliver record performance in the face of a rapidly changing economic climate,” said Chairman, CEO and President Don Washkewicz. “We are particularly pleased that we delivered a four percent organic growth rate this quarter.

“The Win Strategy initiatives we have been implementing over the past seven years have better prepared us to weather this uncertainty in our markets. For example, today, we have exposure to a greater number of end markets, many of them less cyclical than before. We also have much better geographic balance with greater than 50 percent of our industrial segment revenues and profits generated from international markets.

1

“Additionally, our cost structure is much more flexible than in the past and our ongoing focus on lean enterprise is delivering continuing productivity improvements. While the economic outlook for the near future remains uncertain, Parker is better able to adapt to changing circumstances in our operations than in previous downturns.

“While we are currently implementing contingency plans for the short-term, we remain focused on managing our business for the long-term and utilizing our strong cash position. We recently completed four acquisitions, including three on the first day of our fiscal 2009 second quarter, which added just over $460 million in annualized revenues. These investments help us extend our geographic reach and further our exposure to growth markets such as life sciences. Additionally, we repurchased shares and increased our dividend for the 52^nd consecutive year, reflecting our confidence in the future.”

Segment Results

In the Industrial North America segment, first-quarter sales increased 10.1 percent to $1.1 billion, and operating income increased 3.4 percent to $160.5 million, compared with the same period a year ago.

In the Industrial International segment, first-quarter sales increased 11.1 percent to $1.2 billion, and operating income increased 10.6 percent to $203.0 million, compared with the same period a year ago.

In the Aerospace segment, first-quarter sales increased 12.0 percent to $478.5 million, and operating income increased 18.7 percent to $68.1 million, compared with the same period a year ago.

In the Climate & Industrial Controls segment, first-quarter sales increased 1.1 percent to $255.9 million, and operating income remained the same at $15.5 million, compared with the same period a year ago.

Orders

In addition to financial results, Parker also reported an increase of 1 percent in total orders for the quarter

2

ending September 30, 2008 compared with the same quarter a year ago. Parker reported the following orders by operating segment:

• Orders increased 2 percent in the Industrial North America segment, compared with the same quarter a year ago.

• Orders declined 4 percent in the Industrial International segment, compared with the same quarter a year ago.

• Orders increased 9 percent in the Aerospace segment, on a rolling 12 month average basis.

• Orders increased 5 percent in the Climate and Industrial Controls segment, compared with the same quarter a year ago.

Outlook

For fiscal 2009, the company revised guidance for earnings from continuing operations to the range of $5.35 to $5.75 per diluted share. Previous guidance for earnings from continuing operations was $5.65 to $6.05 per diluted share.

“There is enough uncertainty in many of our end markets and sentiment among our customers to warrant a downward revision in our earnings expectations for the year,” added Washkewicz. “While this ultimately may prove to be conservative, at this time we believe it is prudent. Having said that, our earnings guidance still assumes that operating margins will be significantly above the levels we achieved at the bottom of the last economic cycle, evidence that we have made significant progress in transforming Parker into a premier diversified company.”

NOTICE OF CONFERENCE CALL: Parker Hannifin’s conference call and slide presentation to discuss its fiscal first-quarter results is available to all interested parties via live webcast today at 10:00 a.m. ET, on the company’s investor information web site, http://www.phstock.com. To access the call, click on the “Live Webcast” link. From this link, users also may complete a pre-call system test and register for e-mail notification of future events and information available from Parker.

3

With annual sales exceeding $12 billion, Parker Hannifin is the world’s leading diversified manufacturer of motion and control technologies and systems, providing precision-engineered solutions for a wide variety of commercial, mobile, industrial and aerospace markets. The company employs approximately 62,000 people in 48 countries around the world. Parker has increased its annual dividends paid to shareholders for 52 consecutive years, among the top five longest-running dividend-increase records in the S&P 500 index. For more information, visit the company’s web site at http://www.parker.com, or its investor information site at http://www.phstock.com.

Notes on Orders

Orders provide near-term perspective on the company’s outlook, particularly when viewed in the context of prior and future quarterly order rates. However, orders are not in themselves an indication of future performance. All comparisons are at constant currency exchange rates, with the prior year restated to the current-year rates. All exclude acquisitions until they can be reflected in both the numerator and denominator. Aerospace comparisons are rolling 12-month average computations. The Total Parker orders number is derived from a weighted average of the year-over-year quarterly percent change in orders for the Industrial North America, Industrial International, and Climate and Industrial Controls segments, and the year-over-year 12-month rolling average of orders in the Aerospace segment.

Forward-Looking Statements

Forward-looking statements contained in this and other written and oral reports are made based on known events and circumstances at the time of release, and as such, are subject in the future to unforeseen uncertainties and risks. All statements regarding future performance, earnings projections, events or developments are forward-looking statements. It is possible that the future performance and earnings projections of the company and individual segments may differ materially from current expectations, depending on economic conditions within its mobile, industrial and aerospace markets, and the company’s ability to maintain and achieve anticipated benefits associated with announced realignment activities, strategic initiatives to improve operating margins, and growth, innovation and global diversification initiatives. A change in economic conditions in individual markets may have a particularly volatile effect on segment results. Among the other factors which may affect future performance are: changes in business relationships with and purchases by or from major customers or suppliers, including delays or cancellations in shipments or significant changes in financial condition; uncertainties surrounding timing, successful completion or integration of acquisitions; threats associated with and efforts to combat terrorism; uncertainties surrounding the ultimate resolution of outstanding litigation; competitive market conditions and resulting effects on sales and pricing; increases in raw material costs that cannot be recovered in product pricing; the company’s ability to manage costs related to employee retirement and health care benefits and insurance; and global economic factors, including manufacturing activity, air travel trends, currency exchange rates, difficulties entering new markets and general economic conditions such as inflation, interest rates and credit availability. The company makes these statements as of the date of this disclosure, and undertakes no obligation to update them.

###

4

PARKER HANNIFIN CORPORATION - SEPTEMBER 30, 2008

CONSOLIDATED STATEMENT OF INCOME

(Unaudited)

	Three Months Ended September 30,
(Dollars in thousands except per share amounts)	2008		2007
Net sales	$	3,064,688	$	2,787,256
Cost of sales		2,337,222		2,122,297
Gross profit		727,466		664,959
Selling, general and administrative expenses		332,683		324,961
Interest expense		28,096		22,421
Other expense (income), net		9,958		(165	)
Income before income taxes		356,729		317,742
Income taxes		106,553		88,145
Net income	$	250,176	$	229,597
Earnings per share:
Basic earnings per share	$	1.52	$	1.35
Diluted earnings per share	$	1.50	$	1.33
Average shares outstanding during period - Basic		164,415,418		169,782,809
Average shares outstanding during period - Diluted		166,913,216		173,221,492
Cash dividends per common share	$	.25	$	.21
BUSINESS SEGMENT INFORMATION BY INDUSTRY
(Unaudited)
	Three Months Ended September 30,
(Dollars in thousands)	2008		2007
Net sales
Industrial:
North America	$	1,107,077	$	1,005,828
International		1,223,192		1,100,888
Aerospace		478,473		427,290
Climate & Industrial Controls		255,946		253,250
Total	$	3,064,688	$	2,787,256
Segment operating income
Industrial:
North America	$	160,486	$	155,182
International		202,952		183,433
Aerospace		68,148		57,436
Climate & Industrial Controls		15,499		15,506
Total segment operating income	$	447,085	$	411,557
Corporate general and administrative expenses		40,374		45,309
Income from operations before interest expense and other		406,711		366,248
Interest expense		28,096		22,421
Other expense		21,886		26,085
Income before income taxes	$	356,729	$	317,742

PARKER HANNIFIN CORPORATION - SEPTEMBER 30, 2008

CONSOLIDATED BALANCE SHEET

(Unaudited)

(Dollars in thousands) September 30,	2008			2007
Assets
Current assets:
Cash and cash equivalents	$	608,327		$	187,917
Accounts receivable, net		1,821,681			1,784,784
Inventories		1,506,793			1,353,774
Prepaid expenses		72,870			69,148
Deferred income taxes		147,447			128,801
Total current assets		4,157,118			3,524,424
Plant and equipment, net		1,855,830			1,762,165
Goodwill		2,625,761			2,319,803
Intangible assets, net		986,759			610,411
Other assets		507,088			476,190
Total assets	$	10,132,556		$	8,692,993
Liabilities and shareholders’ equity
Current liabilities:
Notes payable	$	677,890		$	580,542
Accounts payable		836,873			779,274
Accrued liabilities		808,566			703,136
Accrued domestic and foreign taxes		219,298			181,987
Total current liabilities		2,542,627			2,244,939
Long-term debt		1,878,933			1,117,677
Pensions and other postretirement benefits		482,895			369,606
Deferred income taxes		165,136			113,192
Other liabilities		319,097			301,451
Shareholders’ equity		4,743,868			4,546,128
Total liabilities and shareholders’ equity	$	10,132,556		$	8,692,993
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
	Three Months Ended September 30,
(Dollars in thousands)	2008			2007
Cash flows from operating activities:
Net income	$	250,176		$	229,597
Depreciation and amortization		86,166			76,176
Stock-based compensation		20,655			23,554
Net change in receivables, inventories, and trade payables		(54,100	)		(79,612	)
Net change in other assets and liabilities		(5,096	)		28,159
Other, net		9,546			(7,629	)
Net cash provided by operating activities		307,347			270,245
Cash flows from investing activities:
Acquisitions (net of cash of $119 in 2008 and $177 in 2007)		(12,088	)		(33,551	)
Capital expenditures		(98,273	)		(56,484	)
Proceeds from sale of plant and equipment		7,437			1,544
Other, net		(8,004	)		(8,188	)
Net cash (used in) investing activities		(110,928	)		(96,679	)
Cash flows from financing activities:
Net (payments for) common share activity		(410,590	)		(497,386	)
Net proceeds from debt		561,558			374,021
Dividends		(41,109	)		(36,544	)
Net cash provided by (used in) financing activities		109,859			(159,909	)
Effect of exchange rate changes on cash		(23,999	)		1,554
Net increase in cash and cash equivalents		282,279			15,211
Cash and cash equivalents at beginning of period		326,048			172,706
Cash and cash equivalents at end of period	$	608,327		$	187,917

EX-99.2

Parker Hannifin Corporation

Quarterly Earnings Release

1st Quarter FY 2009

October 16, 2008

Exhibit 99.2

Slide 2

Forward-Looking Statements

Forward-Looking Statements:

Forward-looking statements contained in this and other written and oral reports are made based

on

known

events

and

circumstances

at

the

time

of

release,

and

as

such,

are

subject

in

the

future to unforeseen uncertainties and risks. All statements regarding future performance,

earnings projections, events or developments are forward-looking statements. It is possible that

the future performance and earnings projections of the company and individual segments may

differ materially from current expectations, depending on economic conditions within its mobile,

industrial

and

aerospace

markets,

and

the

company’s

ability

to

maintain

and

achieve

anticipated benefits associated with announced realignment activities, strategic initiatives to

improve operating margins, and growth, innovation and global diversification initiatives. A

change in economic conditions in individual markets may have a particularly volatile effect on

segment

results.

Among

the

other

factors

which

may

affect

future

performance

are:

changes

in

business relationships with and purchases by or from major customers or suppliers, including

delays or cancellations in shipments or significant changes in financial condition; uncertainties

surrounding timing, successful completion or integration of acquisitions; threats associated with

and efforts to combat terrorism; uncertainties surrounding the ultimate resolution of outstanding

litigation; competitive market conditions and resulting effects on sales and pricing; increases in

raw material costs that cannot be recovered in product pricing; the company’s ability to manage

costs related to employee retirement and health care benefits and insurance; and global

economic factors, including manufacturing activity, air travel trends, currency exchange rates,

difficulties entering new markets and general economic conditions such as inflation, interest

rates and credit availability. The company makes these statements as of the date of this

disclosure, and undertakes no obligation to update them.

Slide 3

Non-GAAP Financial Measure

This presentation reconciles sales amounts reported in accordance

with U.S. GAAP to sales amounts adjusted to remove the effects of

acquisitions made within the prior four quarters as well as the effects

of

currency

exchange

rates

on

sales.

The

effects

of

acquisitions

and

currency exchange rates are removed to allow investors and the

company to meaningfully evaluate changes in sales on a comparable

basis from period to period.

Slide 4

Discussion Agenda

CEO 1

st

quarter highlights

Key performance measures & outlook

Questions & answers

CEO Closing comments

Slide 5

First Quarter Highlights

Record Quarterly Sales, Earnings, and Cash Flow

Q1 Sales growth of 10% -

4% organic

International margins of 16.6%

Earnings per diluted share up 13%

Share repurchases totaling $414 million

Four acquisitions to date -

$463 million revenues

Slide 6

Financial Highlights

Diluted Earnings per Share

1

st

Quarter

$1.33

$1.50

$.00

$.20

$.40

$.60

$.80

$1.00

$1.20

$1.40

$1.60

Q1 FY09

Q1 FY08

Slide 7

Influences on 1

st

Quarter Earnings

Diluted Earnings per Share increased as a result of:

Increased Sales of 10% -

4% organic

S,G&A as percent of Sales decrease of 80 bps

Fewer shares outstanding

Offset by:

Lower Gross Margin –

20 bps

Higher Interest expense –

10 bps

Higher “Other expense”

–

30 bps

Higher

Tax expense due to increased income and a

higher effective tax rate

Slide 8

Financial Highlights

Sales –

1

st

Quarter

Dollars in millions

FY2009

%

Change

FY2008

Sales

As reported

3,065

$

10.0 %

2,787

$

Acquisitions

125

4.6 %

Currency

51

1.8 %

Adjusted Sales

2,889

$

3.7 %

1st Quarter

Slide 9

Influences on Sales

Continued Industrial end market strength

-

International 

-

Distribution

Aerospace

Acquisitions

Emerging markets

Slide 10

Segment Reporting

Industrial North America

Dollars in millions

FY2009

%

Change

FY2008

Sales

As reported

1,107

$

10.1 %

1,006

$

Acquisitions

76

7.6 %

Currency

1

(0.1)%

Adjusted Sales

1,030

$

2.4 %

Operating Margin

As reported

160

$  

155

$  

% of Sales

14.5 %

15.4 %

1st Quarter

Slide 11

Segment Reporting

Industrial International

Dollars in millions

FY2009

%

Change

FY2008

Sales

As reported

1,223

$

11.1 %

1,101

$

Acquisitions

36

3.3 %

Currency

48

4.3 %

Adjusted Sales

1,139

$

3.5 %

Operating Margin

As reported

203

$   

183

$   

  % of Sales

16.6 %

16.7 %

1st Quarter

Slide 12

Segment Reporting

Aerospace

Dollars in millions

FY2009

%

Change

FY2008

Sales

As reported

478

$   

12.0 %

427

$   

Acquisitions

13

3.1 %

Currency

1

0.2 %

Adjusted Sales

464

$   

8.7 %

Operating Margin

As reported

68

$      

57

$      

  % of Sales

14.2 %

13.4 %

1st Quarter

Slide 13

Segment Reporting

Climate & Industrial Controls

Dollars in millions

FY2009

%

Change

FY2008

Sales

As reported

256

$   

1.1 %

253

$   

Acquisitions

Currency

2

0.7 %

Adjusted Sales

254

$   

0.4 %

Operating Margin

As reported

15

$      

16

$      

  % of Sales

6.1 %

6.1 %

1st Quarter

Slide 14

Parker Order Rates

Excludes Acquisitions & Currency

3-month year-over-year comparisons of total dollars, except Aerospace

Aerospace is calculated using a 12-month moving average

FY09

FY08

Total Parker

1 %

+   

7 %

+   

Industrial North America

2 %

+   

0 %

+   

Industrial International

4 %

-    

19 %

+

Aerospace

9 %

+   

12 %

+

Climate & Industrial Controls

5 %

+   

13 %

- 

Three months ending September

Slide 15

Balance Sheet Summary

Cash

Working capital

-

Inventory

-

Accounts receivable

-

Accounts payable

Slide 16

Strong Cash Flow

Cash from Operating Activities

1

st

Quarter

$270

$307

$0

$60

$120

$180

$240

$300

$360

FY09

FY08

Slide 17

Financial Leverage

Debt to Debt Equity

35.0%

16.0%

18.0%

20.0%

22.0%

24.0%

26.0%

28.0%

30.0%

32.0%

34.0%

36.0%

38.0%

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09 YTD

Goal -

Not to exceed 37% over the cycle

29.1% net

Debt to Debt Equity

Slide 18

FY 2009  Earnings Outlook Assumptions

Segment Sales & Operating Income

FY 2009 Operating margin percentages

Industrial North America

13.6 %

--

14.0 %

Industrial International

15.0 %

--

15.4 %

Aerospace

12.8 %

--

13.2 %

Climate & Industrial Controls

4.5 %

--

4.9 %

FY 2009 Sales change versus FY 2008

Industrial North America

2.2 %

--

2.6 %

Industrial International

(.3)%

--

.1 %

Aerospace

2.6 %

--

3.0 %

Climate & Industrial Controls

(3.1)%

--

(2.7)%

Slide 19

FY 2009 Earnings Outlook Assumptions

below Operating Margin

Corporate Admin

+  1% to   -

5% vs. FY 2008

Interest Expense

+ 20% to +12% vs. FY 2008

Other Expense (Inc.) 

-

17% to  -

27%

vs. FY 2008

Tax Rate

29 %

Slide 20

Earnings Outlook –

FY09

Low

High

Diluted earnings per share

5.35

$ 

5.75

$  

Slide 21

Questions & Answers...

*

*

*

*

*

*********************

*

*

*

*

Appendix

Income Statement

1

st

Quarter

*********************************

*

*

*

*

*

Slide 23

Income Statement –

1

st

Quarter

Dollars in millions

% of Sales

% of Sales

Net Sales

3,064.7

$  

100.0 %

2,787.3

$  

100.0 %

Cost of sales

2,337.2

76.3 %

2,122.3

76.1 %

Gross profit

727.5

23.7 %

665.0

23.9 %

S, G & A

332.7

10.9 %

325.0

11.7 %

Interest expense

28.1

.9 %

22.4

.8 %

Other expense (income), net

10.0

.3 %

(.1)

(.0)%

Income before taxes

356.7

11.6 %

317.7

11.4 %

Income taxes

106.5

3.4 %

88.1

3.2 %

Net income

250.2

$      

8.2 %

229.6

$     

8.2 %

FY 2009

FY 2008