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Johnson Controls (JCI) Q2 Earnings Beat, FY23 EPS View Up
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Johnson Controls International plc (JCI - Free Report) reported second-quarter fiscal 2023 (ended Mar 31, 2022) adjusted earnings (excluding 56 cents from non-recurring items) of 75 cents per share, which surpassed the Zacks Consensus Estimate of 73 cents. The bottom line increased 19% year over year. Our estimate for earnings in the fiscal second quarter was 73 cents.
Total revenues of $6,686 million surpassed the Zacks Consensus Estimate of $6,471.3 million. The top line increased 9.6% year over year. Our estimate for total revenues in the fiscal first quarter was $6,391.3 million.
Segmental Results
Building Solutions North America: The segment’s revenues came in at $2,520 million, up 13% year over year. Our estimate for Building Solutions North America revenues stood at $2,401.6 million. Organic sales jumped 14%, owing to growth in the Service and Install businesses due to strong performances in HVAC & Controls, and Fire & Security. The segment’s EBITA increased 34% year over year to $315 million.
Johnson Controls International plc Price, Consensus and EPS Surprise
Building Solutions Europe, Middle East, Africa/Latin America: Revenues from this segment totaled $1,031 million, up 8% year over year. Our estimate for Building Solutions Europe, Middle East Africa/Latin America revenues for the fiscal second quarter was $969.6 million. Organic sales climbed 12% due to low double-digit growth in the Service and Install businesses, thanks to the strength in Fire & Security, and HVAC & Controls. The segment’s EBITA came in at $69 million, down 13% from the year-ago period. Performance was hurt by foreign currency headwinds and certain one-time cost items.
Building Solutions Asia Pacific: Revenues increased 7% to $667 million in the reported quarter. Our estimate for Building Solutions Asia-Pacific revenues was $672.4 million. Sales climbed 15% organically due to continued demand for HVAC & Controls. The segment’s adjusted EBITA came in at $79 million, up 7% year over year.
Global Products: Revenues in this segment climbed 8% year over year to $2,468 million. Our estimate for Global Products revenues in the fiscal fourth quarter was $2,347.6 million. Organic sales rose 12% on the back of strong growth in Applied, Fire Detection, Industrial Refrigeration and Commercial Ducted HVAC products. The segment’s adjusted EBITA came in at $488 million, up 18% year over year, aided by strong price realization and improved productivity.
Financial Position
Johnson Controls had cash and cash equivalents of $1,975 million as of Mar 31, 2023, compared with $2,031 million at the end of fiscal 2022. Long-term debt was $7,832 million compared with $7,426 million at the end of fiscal 2022.
The free cash flow (from continuing operations) was negative $195 million in the first six months of fiscal 2023 against positive $64 million in the year-ago period.
The company repurchased 4.3 million shares for approximately $247 million in the first six months of fiscal 2023.
Fiscal Q3 Guidance
For the fiscal third quarter, Johnson Controls anticipates organic revenue growth of 10% year over year. The adjusted segment EBITA margin is estimated to improve 120 to 130 basis points (bps) year over year. Adjusted earnings per share are expected between $1.01 and $1.03, indicating a year-over-year increase of 19-21%. The Zacks Consensus Estimate for the same stands at $1.01.
FY23 Guidance
Johnson Controls anticipates year-over-year organic revenue growth of 10% (high-single-digit to low-double-digit growth was anticipated earlier). The adjusted segment EBITA margin is expected to improve 100-120 bps year over year (90-120 bps improvement was expected earlier).
Adjusted earnings are estimated between $3.50 and $3.60 per share in fiscal 2023 compared with $3.30-$3.60 stated earlier. The guided range indicates a 17-20% year-over-year increase. The Zacks Consensus Estimate for the same stands at $3.49.
Zacks Rank & Other Key Picks
Johnson Controls carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks within the broader Industrial Products sector are as follows:
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Johnson Controls (JCI) Q2 Earnings Beat, FY23 EPS View Up
Johnson Controls International plc (JCI - Free Report) reported second-quarter fiscal 2023 (ended Mar 31, 2022) adjusted earnings (excluding 56 cents from non-recurring items) of 75 cents per share, which surpassed the Zacks Consensus Estimate of 73 cents. The bottom line increased 19% year over year. Our estimate for earnings in the fiscal second quarter was 73 cents.
Total revenues of $6,686 million surpassed the Zacks Consensus Estimate of $6,471.3 million. The top line increased 9.6% year over year. Our estimate for total revenues in the fiscal first quarter was $6,391.3 million.
Segmental Results
Building Solutions North America: The segment’s revenues came in at $2,520 million, up 13% year over year. Our estimate for Building Solutions North America revenues stood at $2,401.6 million. Organic sales jumped 14%, owing to growth in the Service and Install businesses due to strong performances in HVAC & Controls, and Fire & Security. The segment’s EBITA increased 34% year over year to $315 million.
Johnson Controls International plc Price, Consensus and EPS Surprise
Johnson Controls International plc price-consensus-eps-surprise-chart | Johnson Controls International plc Quote
Building Solutions Europe, Middle East, Africa/Latin America: Revenues from this segment totaled $1,031 million, up 8% year over year. Our estimate for Building Solutions Europe, Middle East Africa/Latin America revenues for the fiscal second quarter was $969.6 million. Organic sales climbed 12% due to low double-digit growth in the Service and Install businesses, thanks to the strength in Fire & Security, and HVAC & Controls. The segment’s EBITA came in at $69 million, down 13% from the year-ago period. Performance was hurt by foreign currency headwinds and certain one-time cost items.
Building Solutions Asia Pacific: Revenues increased 7% to $667 million in the reported quarter. Our estimate for Building Solutions Asia-Pacific revenues was $672.4 million. Sales climbed 15% organically due to continued demand for HVAC & Controls. The segment’s adjusted EBITA came in at $79 million, up 7% year over year.
Global Products: Revenues in this segment climbed 8% year over year to $2,468 million. Our estimate for Global Products revenues in the fiscal fourth quarter was $2,347.6 million. Organic sales rose 12% on the back of strong growth in Applied, Fire Detection, Industrial Refrigeration and Commercial Ducted HVAC products. The segment’s adjusted EBITA came in at $488 million, up 18% year over year, aided by strong price realization and improved productivity.
Financial Position
Johnson Controls had cash and cash equivalents of $1,975 million as of Mar 31, 2023, compared with $2,031 million at the end of fiscal 2022. Long-term debt was $7,832 million compared with $7,426 million at the end of fiscal 2022.
The free cash flow (from continuing operations) was negative $195 million in the first six months of fiscal 2023 against positive $64 million in the year-ago period.
The company repurchased 4.3 million shares for approximately $247 million in the first six months of fiscal 2023.
Fiscal Q3 Guidance
For the fiscal third quarter, Johnson Controls anticipates organic revenue growth of 10% year over year. The adjusted segment EBITA margin is estimated to improve 120 to 130 basis points (bps) year over year. Adjusted earnings per share are expected between $1.01 and $1.03, indicating a year-over-year increase of 19-21%. The Zacks Consensus Estimate for the same stands at $1.01.
FY23 Guidance
Johnson Controls anticipates year-over-year organic revenue growth of 10% (high-single-digit to low-double-digit growth was anticipated earlier). The adjusted segment EBITA margin is expected to improve 100-120 bps year over year (90-120 bps improvement was expected earlier).
Adjusted earnings are estimated between $3.50 and $3.60 per share in fiscal 2023 compared with $3.30-$3.60 stated earlier. The guided range indicates a 17-20% year-over-year increase. The Zacks Consensus Estimate for the same stands at $3.49.
Zacks Rank & Other Key Picks
Johnson Controls carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks within the broader Industrial Products sector are as follows:
Ingersoll Rand (IR - Free Report) presently sports a Zacks Rank #1 (Strong Buy). The company pulled off a trailing four-quarter earnings surprise of 12.6%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
Ingersoll Rand has an estimated earnings growth rate of 7.2% for the current year. The stock has rallied 9.3% in the year-to-date period.
Allegion (ALLE - Free Report) presently carries a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 12.5%, on average.
Allegion has an estimated earnings growth rate of 15.1% for the current year. The stock has gained approximately 2% in the year-to-date period.