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Johnson Controls (JCI) Beats on Q3 Earnings, Revises FY'22 View
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Johnson Controls International (JCI - Free Report) reported adjusted third-quarter fiscal 2022 earnings per share of 85 cents, marginally beating the Zacks Consensus Estimate of 84 cents and rising 3% year over year from 83 cents. Higher-than-anticipated sales and EBITA in the Building Solutions North America and Global Products segments, respectively, led to the outperformance. The company reported adjusted revenues of $6,614 million, up 4% year over year. The top line, however, missed the Zacks Consensus Estimate of $6,728 million.
Johnson Controls International plc Price, Consensus and EPS Surprise
Building Solutions North America: This segment’s adjusted revenues came in at $2,426 million, up 10% from the year-ago quarter, led by growth in HVAC & Controls platform. The metric also topped the Zacks Consensus Estimate of $2,395 million. The segment’s adjusted EBITA decreased to $260 million from $326 million reported in third-quarter fiscal 2021 and lagged the consensus mark of $322 million.
Building Solutions Europe, Middle East, Africa/Latin America: Revenues from this segment totaled $952 million, down 5% year over year, with double-digit growth in Service, and solid performance in Fire & Security platforms. The metric also missed the consensus mark of $1,022 million. The segment’s adjusted EBITA came in at $83 million, down from $105 million in the comparable year-ago period and came short of the consensus mark of $104 million.
Building Solutions Asia Pacific: Revenues were $665 million, down 5% year over year. The metric also missed the consensus mark of $714 million. The segment’s adjusted EBITA came in at $85 million, slightly up from $84 million in the year-ago period and matched the consensus mark.
Global Products: Revenues in this segment climbed to $2,571 million, increasing 6% year over year, mainly on strong pricing and demand for Commercial and Residential HVAC and Fire Detection products. The figure, however, missed the consensus mark of $2,595 million. The segment’s adjusted EBITA significantly increased to $570 million from $512 million a year ago, aided by operational efficiency, favorable product mix and positive pricing. The metric also beat the Zacks Consensus Estimate of $509 million.
Financial Position
Johnson Controls had cash and cash equivalents of $1,506 million as of Jun 30, 2022, up from $1,336 million recorded on Sep 30, 2021. Long-term debt decreased to $7,194 million from $7,506 million as of Sep 30, 2021. Free cash flow in the quarter was $317 million. Johnson Controls completed more than $400 million and $1.4 billion share repurchases in the reported quarter and year to date, respectively.
Guidance
For fourth-quarter fiscal 2022, Johnson Controls expects adjusted EPS in the range of 96 cents to $1 per share. It forecasts organic revenue growth in the band of 9-10% on a year-over-year basis. Adjusted segment EBITA margin is anticipated to improve 40-60 basis points.
JCI has modified its fiscal 2022 guidance. Adjusted EPS expectation is now in the band of $2.98-$3.02, from the previous range of $2.95-$3.05, implying a 12-14% jump on a year-over-year basis. Organic sales growth is envisioned in the range of 8-9% year over year from the earlier view of 8-10%. Adjusted segment EBITA margin is expected to be down by 10 to 20 basis points year over year.
MSA Safety has an expected earnings growth rate of 13.2% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 1.5% upward in the past 30 days.
MSA Safety’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missed in one and matched with the estimate in one. MSA pulled off a trailing four-quarter earnings surprise of 8.91%, on average. The stock has declined 20.2% in the past year.
Axon’s has an expected earnings growth rate of 20.4% for 2023. The Zacks Consensus Estimate for current-year earnings has remained constant in the past 30 days.
Axon’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. AXON pulled off a trailing four-quarter earnings surprise of 168.39%, on average. The stock has risen 39.8% over the past year.
Brady has an expected earnings growth rate of 16.9% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 3.3% upward in the past 30 days.
Brady’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. BRC pulled off a trailing four-quarter earnings surprise of 2.58%, on average. The stock has declined 11.4% in the past year.
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Johnson Controls (JCI) Beats on Q3 Earnings, Revises FY'22 View
Johnson Controls International (JCI - Free Report) reported adjusted third-quarter fiscal 2022 earnings per share of 85 cents, marginally beating the Zacks Consensus Estimate of 84 cents and rising 3% year over year from 83 cents. Higher-than-anticipated sales and EBITA in the Building Solutions North America and Global Products segments, respectively, led to the outperformance. The company reported adjusted revenues of $6,614 million, up 4% year over year. The top line, however, missed the Zacks Consensus Estimate of $6,728 million.
Johnson Controls International plc Price, Consensus and EPS Surprise
Johnson Controls International plc price-consensus-eps-surprise-chart | Johnson Controls International plc Quote
Segmental Results
Building Solutions North America: This segment’s adjusted revenues came in at $2,426 million, up 10% from the year-ago quarter, led by growth in HVAC & Controls platform. The metric also topped the Zacks Consensus Estimate of $2,395 million. The segment’s adjusted EBITA decreased to $260 million from $326 million reported in third-quarter fiscal 2021 and lagged the consensus mark of $322 million.
Building Solutions Europe, Middle East, Africa/Latin America: Revenues from this segment totaled $952 million, down 5% year over year, with double-digit growth in Service, and solid performance in Fire & Security platforms. The metric also missed the consensus mark of $1,022 million. The segment’s adjusted EBITA came in at $83 million, down from $105 million in the comparable year-ago period and came short of the consensus mark of $104 million.
Building Solutions Asia Pacific: Revenues were $665 million, down 5% year over year. The metric also missed the consensus mark of $714 million. The segment’s adjusted EBITA came in at $85 million, slightly up from $84 million in the year-ago period and matched the consensus mark.
Global Products: Revenues in this segment climbed to $2,571 million, increasing 6% year over year, mainly on strong pricing and demand for Commercial and Residential HVAC and Fire Detection products. The figure, however, missed the consensus mark of $2,595 million. The segment’s adjusted EBITA significantly increased to $570 million from $512 million a year ago, aided by operational efficiency, favorable product mix and positive pricing. The metric also beat the Zacks Consensus Estimate of $509 million.
Financial Position
Johnson Controls had cash and cash equivalents of $1,506 million as of Jun 30, 2022, up from $1,336 million recorded on Sep 30, 2021. Long-term debt decreased to $7,194 million from $7,506 million as of Sep 30, 2021. Free cash flow in the quarter was $317 million. Johnson Controls completed more than $400 million and $1.4 billion share repurchases in the reported quarter and year to date, respectively.
Guidance
For fourth-quarter fiscal 2022, Johnson Controls expects adjusted EPS in the range of 96 cents to $1 per share. It forecasts organic revenue growth in the band of 9-10% on a year-over-year basis. Adjusted segment EBITA margin is anticipated to improve 40-60 basis points.
JCI has modified its fiscal 2022 guidance. Adjusted EPS expectation is now in the band of $2.98-$3.02, from the previous range of $2.95-$3.05, implying a 12-14% jump on a year-over-year basis. Organic sales growth is envisioned in the range of 8-9% year over year from the earlier view of 8-10%. Adjusted segment EBITA margin is expected to be down by 10 to 20 basis points year over year.
Zacks Rank & Key Picks
JCI carries a Zacks Rank #3 (Hold), currently.
Better-ranked players in the security and safety services space include MSA Safety Incorporated (MSA - Free Report) , Axon Enterprise, Inc. (AXON - Free Report) and Brady Corporation (BRC - Free Report) , each carrying a Zacks Rank #2 (Buy), currently. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
MSA Safety has an expected earnings growth rate of 13.2% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 1.5% upward in the past 30 days.
MSA Safety’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missed in one and matched with the estimate in one. MSA pulled off a trailing four-quarter earnings surprise of 8.91%, on average. The stock has declined 20.2% in the past year.
Axon’s has an expected earnings growth rate of 20.4% for 2023. The Zacks Consensus Estimate for current-year earnings has remained constant in the past 30 days.
Axon’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. AXON pulled off a trailing four-quarter earnings surprise of 168.39%, on average. The stock has risen 39.8% over the past year.
Brady has an expected earnings growth rate of 16.9% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 3.3% upward in the past 30 days.
Brady’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. BRC pulled off a trailing four-quarter earnings surprise of 2.58%, on average. The stock has declined 11.4% in the past year.