Your webserver executes php code before it sends the page back to the client. So the only way somebody will be able to read your php code is if you let them access it without going through the webserver (ie. ftp).
Try POBS encoder and SourceGuardian encoder. It's not possible to hide code from anyone who has access to your web server with appropriate permissions. But there are some software like POBS, makes your code unreadable to humans, but it can be interpretted by PHP and works normally.