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What Awaits Johnson Controls (JCI) This Earnings Season?

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Johnson Controls International plc (JCI - Free Report) is slated to release first-quarter fiscal 2021 results tomorrow, before the opening bell. The Zacks Consensus Estimate for the company’s quarterly earnings and revenues is pegged at 40 cents per share and $5,284 million, respectively.

It delivered better-than-expected results in the last reported quarter on higher-than-anticipated EBITA from the Building Solutions North America segment. 

The company surpassed earnings estimates in each of the trailing four quarters, with the average being 13.5%. This is depicted in the graph below:

Investors project an earnings beat for Johnson Controls this time around as well. Reassuringly, our model also indicates the same.

Trend in Estimate Revision

The Zacks Consensus Estimate for Johnson Controls’ fiscal first-quarter earnings per share has moved north by 2 cents over the past 90 days. Notably, the Zacks Consensus Estimate for the to-be-reported quarter’s earnings indicates no change from the year-ago recorded figure. The same for quarterly revenues suggests a year-over-year decline of 5.2%.

Earnings Whispers

Our proven model predicts an earnings beat for Johnson Controls this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This has been elaborated below.

Earnings ESP: Johnson Controls has an Earnings ESP of +1.77%. This is because the Most Accurate Estimate is pegged a penny higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Johnson Controls currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Setting the Tone

With the gradual recovery of the economy from the coronavirus pandemic, the HVAC equipment market and fire & security businesses have been witnessing growth. Johnson Controls’ quarterly results will likely reflect favorable impact of higher income on HVAC and Building Management Solutions platforms, primarily in the Asia-Pacific and Europe, Middle East, as well as Africa/Latin America (EMEA) regions.

The launch of OpenBlue, the company’s latest digital platform, in the fiscal third quarter is anticipated to have been conducive to Johnson Controls’ top line. Digital integration of OpenBlue with Johnson Controls' core building systems is expected to have optimized the performance of the entire HVAC system, making the shared spaces safer and more sustainable during the period under consideration. Further, the company’s cost-containment efforts in response to the coronavirus pandemic are likely to have buoyed earnings during the to-be-reported quarter.

The Zacks Consensus Estimate for EBITDA from Building Solutions Asia Pacific for the period in discussion is pegged at $83 million, indicating an increase from the prior-year quarter’s $72 million. The consensus mark for sales in the Asia Pacific region is pegged at $647 million, suggesting growth from $629 million recorded in the year-ago period. Also, the same for EBITDA from Building Solutions EMEA for the to-be-reported quarter is $95 million, implying an improvement from $90 million reported in the year-ago period.

Other Stocks to Consider

Below we have highlighted a few other stocks that too have the perfect mix of elements to surpass earnings estimates in the upcoming quarterly releases.

Triumph Group (TGI - Free Report) has an Earnings ESP of +7.14% and a Zacks Rank #2. The company is set to release quarterly results on Feb 3. 

Ford (F - Free Report) has an Earnings ESP of +11.11% and a Zacks Rank #1. The company is slated to release quarterly results on Feb 4. 

Sun Life Financial Inc. (SLF - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #2. The company is scheduled to release quarterly results on Feb 10. 

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