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Johnson Controls (JCI) Q2 Earnings: What's in the Cards?
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Johnson Controls International plc (JCI - Free Report) is set to report second-quarter fiscal 2017 (ended Mar 31, 2017) results, before the market opens on Apr 27. In the last quarter, the company posted a positive earnings surprise of 1.92%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
In fiscal 2017, Johnson Controls expects to generate strong earnings based on solid operational execution and cost benefits from mergers. The company expects adjusted earnings per share in the band of $2.60–$2.75 for fiscal 2017, compared with $2.31 per share earned in fiscal 2016. This represents a year-over-year increase of 13–19%. Revenues are expected to increase 2.5–4.5% in fiscal 2017. In addition, the company expects to achieve around $1 billion of cost saving due to benefits of merger and better productivity. Earnings per share is projected in the range of 48–50 cents, up 7% to 11%, for the second-quarter fiscal 2017.
Johnson Controls actively undertakes acquisitions and mergers. Johnson Controls’ merger with Tyco is part of the former’s strategy to become a leading global multi-industrial company, which will enhance the buildings platform of Johnson Controls and augment its global businesses.
Johnson Controls has been focusing on market expansion in China as it anticipates significant growth opportunities therein. Moreover, the company is gaining strategic contracts which are aiding its business expansion.
However, the company's divestitures are negatively impacting revenues and profits. The company has signed a definitive agreement for the sale of its Scott Safety business. Moreover, deconsolidation of its automotive interiors business and negative currency translations are also hurting sales. Volatility in commodity costs is another concern.
Earnings Whispers
Our proven model does not conclusively show that Johnson Controls is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: The Earnings ESP for Johnson Controls is 0.00% because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 50 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Johnson Controls International PLC Price and EPS Surprise
Zacks Rank: Johnson Controls currently carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Price Performance
Johnson Controls’ share price dropped 3.16% in the last three months underperforming the Zacks categorized Security and Safety Services industry’s 0.46% gain.
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
CNH Industrial N.V. (CNHI - Free Report) has an earnings surprise of +33.33% and carries a Zacks Rank #2. The company’s first-quarter 2017 financial results are expected to release on Apr 27.
General Motors Company (GM - Free Report) has an earnings surprise of +3.5% and carries a Zacks Rank #3. The company’s first-quarter 2017 financial results are scheduled to release on Apr 28.
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Johnson Controls (JCI) Q2 Earnings: What's in the Cards?
Johnson Controls International plc (JCI - Free Report) is set to report second-quarter fiscal 2017 (ended Mar 31, 2017) results, before the market opens on Apr 27. In the last quarter, the company posted a positive earnings surprise of 1.92%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
In fiscal 2017, Johnson Controls expects to generate strong earnings based on solid operational execution and cost benefits from mergers. The company expects adjusted earnings per share in the band of $2.60–$2.75 for fiscal 2017, compared with $2.31 per share earned in fiscal 2016. This represents a year-over-year increase of 13–19%. Revenues are expected to increase 2.5–4.5% in fiscal 2017. In addition, the company expects to achieve around $1 billion of cost saving due to benefits of merger and better productivity. Earnings per share is projected in the range of 48–50 cents, up 7% to 11%, for the second-quarter fiscal 2017.
Johnson Controls actively undertakes acquisitions and mergers. Johnson Controls’ merger with Tyco is part of the former’s strategy to become a leading global multi-industrial company, which will enhance the buildings platform of Johnson Controls and augment its global businesses.
Johnson Controls has been focusing on market expansion in China as it anticipates significant growth opportunities therein. Moreover, the company is gaining strategic contracts which are aiding its business expansion.
However, the company's divestitures are negatively impacting revenues and profits. The company has signed a definitive agreement for the sale of its Scott Safety business. Moreover, deconsolidation of its automotive interiors business and negative currency translations are also hurting sales. Volatility in commodity costs is another concern.
Earnings Whispers
Our proven model does not conclusively show that Johnson Controls is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: The Earnings ESP for Johnson Controls is 0.00% because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 50 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Johnson Controls International PLC Price and EPS Surprise
Johnson Controls International PLC Price and EPS Surprise | Johnson Controls International PLC Quote
Zacks Rank: Johnson Controls currently carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Price Performance
Johnson Controls’ share price dropped 3.16% in the last three months underperforming the Zacks categorized Security and Safety Services industry’s 0.46% gain.
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Visteon Corporation (VC - Free Report) has an Earnings ESP of +5.8% and a Zacks Rank #1. The company is likely to report first-quarter 2017 results on Apr 27. You can see the complete list of today’s Zacks #1 Rank stocks here.
CNH Industrial N.V. (CNHI - Free Report) has an earnings surprise of +33.33% and carries a Zacks Rank #2. The company’s first-quarter 2017 financial results are expected to release on Apr 27.
General Motors Company (GM - Free Report) has an earnings surprise of +3.5% and carries a Zacks Rank #3. The company’s first-quarter 2017 financial results are scheduled to release on Apr 28.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>