ETN Eaton Corp New

Parker Hannifin Corporation (PH) expanded its presence in Korea with the acquisition of SSD Korea Co Ltd. Based in Seoul, Korea. SSD Korea leads in motion and control technologies. The scope of work of SSD Korea involved sales, distribution, system integration and application support for electromechanical drives and motors used in industrial and entertainment market purpose. The deal requisites were not discussed.

In 2010, SSD Korea generated sales of approximately $16 million. The acquired company will become a business unit of the Parker Korea Sales Company, a business unit of Parker Hannifin Corporation, and will incorporate SSD Korea within the Asia Pacific Group. Results will be reported within Parker's Industrial International reporting segment.

The Asia Pacific region provides substantial opportunity for growth. The acquisition will help Parker to reap the benefit from this developing region as the company will be able to expand its channel and technical capabilities in local markets. Further, by using the local market expertise and systems design, fabrication and service competencies, Parker’s Automation Group will increase its presence in Korea.  

We believe Parker Hannifin is a high-quality company that is showing good execution through its cost-saving efforts. Although Parker Hannifin stands to benefit from a recovery in global manufacturing activity, the company’s increased scale in its international business as well as its meaningful aerospace presence increases its late-cycle exposure relative to the past economic cycles.

However, the company’s domestic and foreign operations are subject to significant competitive pressures. To compete successfully, the company’s Industrial Segment and Climate & Industrial Controls Segment must excel in terms of product quality and innovation, customer service, manufacturing and distribution capability and price competitiveness. Meanwhile, the Aerospace Segment must excel on the basis of technological and engineering capability, quality, delivery and service, and price competitiveness.

Parker-Hannifin Corporation is a leading worldwide full-line diversified manufacturer of motion and control technologies and systems, including fluid power systems, electromechanical controls and related components. In addition to motion and control products, the company is also a leading worldwide producer of fluid purification, fluid and fuel control, process instrumentation, air conditioning, refrigeration, electromagnetic shielding and thermal management products and systems. The company was incorporated in Ohio in 1938. Major competitors of Parker are Eaton Corporation (ETN) and Honeywell International Inc. (HON).

We currently maintain our Neutral rating on Parker Hannifinfor the long term, with a Zacks #1 Rank (short-term Strong Buy recommendation) over the next one-to-three months.

 
EATON CORP (ETN): Free Stock Analysis Report
 
HONEYWELL INTL (HON): Free Stock Analysis Report
 
PARKER HANNIFIN (PH): Free Stock Analysis Report
 
Zacks Investment Research