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What to Note Ahead of Johnson Controls' (JCI) Q1 Earnings
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Johnson Controls International plc (JCI - Free Report) is scheduled to release first-quarter fiscal 2024 (ended Dec 31, 2023) financial numbers on Jan 30, before market open.
The company’s earnings surpassed the Zacks Consensus Estimate twice in the trailing four quarters while matching on one occasion and missing on the remaining one. The average earnings surprise was 0.2%. In the last reported quarter, its earnings of $1.05 per share lagged the Zacks Consensus Estimate of $1.09 by 3.7%.
Image Source: Zacks Investment Research
In the past three months, JCI’s shares have gained 12.5% compared with the industry’s growth of 17.4%.
Key Factors and Estimates for Q1
Johnson Controls is expected to put up a weak show in the upcoming earnings result due to weakness across its Global Products and Building Solutions Asia Pacific segments. A slowdown in the residential market is expected to have hurt the Global Products segment. Also, challenging end-market conditions in China are likely to have marred the performance of the Building Solutions Asia Pacific segment’s Install business in the to-be-reported quarter.
Our estimates for the company’s fiscal first-quarter revenues for Global Products and Building Solutions Asia Pacific segments are pegged at $1,970.8 million and $620.2 million, respectively, suggesting year-over-year declines of 5.3% and 4%, respectively.
The escalating cost of sales poses a threat to Johnson Controls’ bottom line. High commodity prices are expected to have pushed up its cost of sales, which might be reflected in its margins in the fiscal first quarter. We expect the company’s cost of sales to escalate 5.2% year over year in the to-be-reported quarter.
JCI’s weak liquidity position is likely to have impacted its operational performance in the quarter under review. For instance, it exited the fourth quarter of fiscal 2023 with cash and cash equivalents of $835 million, less than its short-term debt and current portion of long-term debt of $1,030 million.
Given Johnson Controls’ substantial international operations, foreign-currency woes might have hurt its top line in the fiscal first quarter. It is worth noting that adverse foreign currency translations impacted the company’s top line to the tune of $616 million in fiscal 2023.
Nevertheless, management has been trying to improve performance through operational initiatives. For instance, the company has been benefiting from improving supply chains and strength across its longer-cycle businesses due to the growing adoption of digital offerings.
Johnson Controls International plc Price and EPS Surprise
Our proven model does not conclusively predict 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. But that’s not the case here.
Johnson Controls has an Earnings ESP of +0.56%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
JCI presently carries a Zacks Rank #5 (Strong Sell).
Stocks With the Favorable Combination
Here are a few companies, which according to our model, have the right combination to beat on earnings this reporting cycle:
AZZ’s earnings for the to-be-reported quarter are expected to increase 126.7%. The consensus mark for its quarterly earnings has moved down by 4.2% to 68 cents per share in the past 60 days.
The Zacks Consensus Estimate for AZZ’s quarterly revenues is pegged at $352.5 million, which suggests growth of 4.7% from the figure reported in the prior-year quarter.
A. O. Smith Corporation (AOS - Free Report) has an Earnings ESP of +3.80% and currently carries a Zacks Rank #2. The company is likely to register growth in the top and bottom lines when it reports fourth-quarter 2023 numbers. The consensus mark for AOS’ quarterly earnings has moved up by 2.2% to 95 cents per share in the past 60 days. The consensus estimate suggests 10.5% growth from the year-ago quarter’s reported number.
The Zacks Consensus Estimate for A. O. Smith’s quarterly revenues is pegged at $982.4 million, suggesting growth of 5% from the figure reported in the prior-year quarter.
Alarm.com Holdings (ALRM - Free Report) has an Earnings ESP of +8.79% and carries a Zacks Rank #3. ALRM’s earnings for the to-be-reported quarter are expected to decrease by 9.4% on a year-over-year basis. The consensus mark for its quarterly earnings has moved up by 4.3% to 48 cents per share in the past 60 days.
The Zacks Consensus Estimate for Alarm.com’s quarterly revenues is pegged at $225.2 million, which suggests growth of 8.2% from the figure reported in the prior-year quarter.
Image: Bigstock
What to Note Ahead of Johnson Controls' (JCI) Q1 Earnings
Johnson Controls International plc (JCI - Free Report) is scheduled to release first-quarter fiscal 2024 (ended Dec 31, 2023) financial numbers on Jan 30, before market open.
The company’s earnings surpassed the Zacks Consensus Estimate twice in the trailing four quarters while matching on one occasion and missing on the remaining one. The average earnings surprise was 0.2%. In the last reported quarter, its earnings of $1.05 per share lagged the Zacks Consensus Estimate of $1.09 by 3.7%.
Image Source: Zacks Investment Research
In the past three months, JCI’s shares have gained 12.5% compared with the industry’s growth of 17.4%.
Key Factors and Estimates for Q1
Johnson Controls is expected to put up a weak show in the upcoming earnings result due to weakness across its Global Products and Building Solutions Asia Pacific segments. A slowdown in the residential market is expected to have hurt the Global Products segment. Also, challenging end-market conditions in China are likely to have marred the performance of the Building Solutions Asia Pacific segment’s Install business in the to-be-reported quarter.
Our estimates for the company’s fiscal first-quarter revenues for Global Products and Building Solutions Asia Pacific segments are pegged at $1,970.8 million and $620.2 million, respectively, suggesting year-over-year declines of 5.3% and 4%, respectively.
The escalating cost of sales poses a threat to Johnson Controls’ bottom line. High commodity prices are expected to have pushed up its cost of sales, which might be reflected in its margins in the fiscal first quarter. We expect the company’s cost of sales to escalate 5.2% year over year in the to-be-reported quarter.
JCI’s weak liquidity position is likely to have impacted its operational performance in the quarter under review. For instance, it exited the fourth quarter of fiscal 2023 with cash and cash equivalents of $835 million, less than its short-term debt and current portion of long-term debt of $1,030 million.
Given Johnson Controls’ substantial international operations, foreign-currency woes might have hurt its top line in the fiscal first quarter. It is worth noting that adverse foreign currency translations impacted the company’s top line to the tune of $616 million in fiscal 2023.
Nevertheless, management has been trying to improve performance through operational initiatives. For instance, the company has been benefiting from improving supply chains and strength across its longer-cycle businesses due to the growing adoption of digital offerings.
Johnson Controls International plc Price and EPS Surprise
Johnson Controls International plc price-eps-surprise | Johnson Controls International plc Quote
What the Zacks Model Unveils
Our proven model does not conclusively predict 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. But that’s not the case here.
Johnson Controls has an Earnings ESP of +0.56%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
JCI presently carries a Zacks Rank #5 (Strong Sell).
Stocks With the Favorable Combination
Here are a few companies, which according to our model, have the right combination to beat on earnings this reporting cycle:
AZZ Inc. (AZZ - Free Report) has an Earnings ESP of +2.71% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
AZZ’s earnings for the to-be-reported quarter are expected to increase 126.7%. The consensus mark for its quarterly earnings has moved down by 4.2% to 68 cents per share in the past 60 days.
The Zacks Consensus Estimate for AZZ’s quarterly revenues is pegged at $352.5 million, which suggests growth of 4.7% from the figure reported in the prior-year quarter.
A. O. Smith Corporation (AOS - Free Report) has an Earnings ESP of +3.80% and currently carries a Zacks Rank #2. The company is likely to register growth in the top and bottom lines when it reports fourth-quarter 2023 numbers. The consensus mark for AOS’ quarterly earnings has moved up by 2.2% to 95 cents per share in the past 60 days. The consensus estimate suggests 10.5% growth from the year-ago quarter’s reported number.
The Zacks Consensus Estimate for A. O. Smith’s quarterly revenues is pegged at $982.4 million, suggesting growth of 5% from the figure reported in the prior-year quarter.
Alarm.com Holdings (ALRM - Free Report) has an Earnings ESP of +8.79% and carries a Zacks Rank #3. ALRM’s earnings for the to-be-reported quarter are expected to decrease by 9.4% on a year-over-year basis. The consensus mark for its quarterly earnings has moved up by 4.3% to 48 cents per share in the past 60 days.
The Zacks Consensus Estimate for Alarm.com’s quarterly revenues is pegged at $225.2 million, which suggests growth of 8.2% from the figure reported in the prior-year quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.