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Johnson Controls' Q4 Earnings Surpass Estimates, Revenues Miss

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Johnson Controls International plc (JCI - Free Report) reported fourth-quarter fiscal 2024 (ended September 2024) adjusted earnings of $1.28 per share, which beat the Zacks Consensus Estimate of $1.25. The bottom line increased 21.9% year over year.

Total revenues (continuing operations) of $6.25 billion missed the consensus estimate of $7.26 billion. The top line increased 6.7% year over year, while organic revenues increased 10%.

For fiscal 2024, the company’s adjusted earnings were $3.71 per share, up 6% year over year. Total revenues of $23 billion reflected an increase of 2.8% year over year.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Q4 Segmental Results

Building Solutions North America: Revenues were $3.2 billion, up 16% year over year. Our estimate was $2.9 billion. Organic sales jumped 16%, driven by the strong performance of applied heating, ventilation and air conditioning (HVAC) and controls businesses.  Adjusted EBITA increased 13% year over year to $484 million.

Building Solutions Europe, Middle East, Africa/Latin America: Revenues totaled $1.1 billion, up 7% year over year. Our estimate was $1.1 billion. Organic sales climbed 10% due to growth in controls, security and industrial refrigeration businesses. Adjusted EBITA was $128 million, up 56% year over year.

Building Solutions Asia Pacific: Revenues decreased 5% to $664 million. Sales declined 5% organically due to weakness in the systems business in China. Adjusted EBITA was $94 million, flat year over year.

Global Products: The segment reported revenues of $2.4 billion, flat year over year. Our estimate was $2.6 billion. Organic sales were up 8% due to an increase in the commercial and residential HVAC businesses. Adjusted EBITA was $670 million, up 33% year over year.

JCI’s Margin Profile

In the fiscal fourth quarter, Johnson Controls’ cost of sales increased 2.6% year over year to approximately $4 billion. Gross profit increased 15% year over year to $2.3 billion and the margin increased 260 basis points (bps) to 36.3%. Selling, general and administrative expenses were $1.4 billion, up 4.5% year over year.

Financial Position

Johnson Controls had cash and cash equivalents of $606 million as of Sept. 30, 2024, compared with $828 million at the end of fiscal 2023. Long-term debt was $8 billion compared with $7.82 billion at the end of fiscal 2023.

In fiscal 2024, the company generated net cash of $1.57 billion from operating activities compared with $1.86 billion in the year-ago period. It reported a free cash flow of $1.57 billion in the fiscal year compared with $1.68 billion in the year-ago period.

The company repurchased 5.4 million shares for approximately $370 million in the fiscal fourth quarter.

JCI’s Q1 Fiscal 2025 Guidance

Johnson Controls anticipates mid-single digit organic revenue growth from the year-ago level. Adjusted segment EBITA margin is estimated to be approximately 14.5%. JCI expects adjusted earnings to be in the range of 57-60 cents per share.

Fiscal 2025 Guidance

Johnson Controls anticipates organic revenue growth to be in the mid-single digit range from the prior-year level. Adjusted segment EBITA margin is expected to improve more than 50 bps from the year-ago actual. JCI expects adjusted earnings to be in the range of $3.40-$3.50 per share.

JCI’s Zacks Rank & Key Picks

JCI currently carries a Zacks Rank #3 (Hold). Here are some better-ranked stocks from the same space:

Zebra Technologies Corporation (ZBRA - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ZBRA delivered a trailing four-quarter average earnings surprise of 10.2%. In the past 60 days, the Zacks Consensus Estimate for Zebra Technologies’ 2024 earnings has increased 9.2%.

Crane Company (CR - Free Report) currently carries a Zacks Rank #2 (Buy). CR delivered a trailing four-quarter average earnings surprise of 7.6%. In the past 60 days, the consensus estimate for Crane’s 2024 earnings has increased 1%.

Ingersoll-Rand plc (IR - Free Report) presently carries a Zacks Rank of 2. IR delivered a trailing four-quarter average earnings surprise of 9.1%.

In the past 60 days, the consensus estimate for Ingersoll-Rand’s 2024 earnings has inched up 0.6%.

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