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Johnson Controls Gears Up to Report Q2 Earnings: What to Expect?

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Johnson Controls International plc (JCI - Free Report) is scheduled to release second-quarter fiscal 2025 (ended March 2025) financial numbers on May 7, before market open.

The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average surprise was 5.1%. In the last reported quarter, its earnings of 64 cents per share beat the consensus estimate of 59 cents by 8.5%.

The consensus estimate for revenues is pegged at $5.64 billion, indicating a decrease of 15.8% from the year-ago quarter’s figure. The consensus estimate for adjusted earnings is pinned at 77 cents per share, indicating a decrease of 1.3% from the year-ago quarter’s figure. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Key Factors and Estimates to Note Ahead of JCI’s Earnings Release

The Building Solutions North America segment is expected to have benefited from solid demand for heating, ventilation and air conditioning (HVAC) platforms in data centers and strength in the controls businesses.

The Building Solutions Europe, the Middle East, Africa/Latin America segment is expected to have benefited from strength in the service, controls, fire, security and industrial refrigeration businesses. Our estimate for the segment’s revenues is pegged at $1.1 billion, indicating a 0.5% increase from the year-ago figure.

Solid momentum in the service business is expected to have driven the performance of the Building Solutions Asia Pacific segment. We expect revenues from the segment to decrease 14.3% year over year to $434.8 million.

Growth in applied HVAC, fire & security and Industrial refrigeration businesses is likely to have aided the company’s Global Products segment. We expect the segment’s revenues to increase 8.3% year over year to $531.5 million in the second quarter.

Investments in digital offerings, like the OpenBlue platform that plays an integral part in meeting customer needs, are expected to have driven the company’s revenues.

We expect the company’s total revenues to be $5.64 billion for the fiscal second quarter, indicating an increase of 0.8% year over year.

However, the escalating selling, general and administrative (SG&A) expenses pose a threat to Johnson Controls’ bottom line. Higher insurance recovery costs are expected to have pushed up the SG&A expenses, which are likely to have impacted its margins in the fiscal second quarter.

JCI has considerable exposure to overseas markets. Given the company’s substantial international operations, foreign currency headwinds are likely to have marred its margins and profitability.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for JCI 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, which is not the case here, as elaborated below.

Earnings ESP: JCI has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 77 cents per share. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: JCI presently carries a Zacks Rank #4 (Sell).

Performance of Another Company

AZZ Inc. (AZZ - Free Report) came out with quarterly earnings of $0.98 per share, beating the Zacks Consensus Estimate of $0.95. This compares with earnings of $0.93 per share a year ago.

AZZ reported revenues of $351.88 million, missing the consensus estimate by 3.77%. This compares with year-ago revenues of $366.5 million.

Stocks to Consider

Here are some companies, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.

Sealed Air Corporation (SEE - Free Report) has an Earnings ESP of +0.12% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is slated to release first-quarter 2025 results on May 6. Illinois Tool’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 27.1%.

Trimble Inc. (TRMB - Free Report) has an Earnings ESP of +5.44% and a Zacks Rank of 3 at present. The company is scheduled to release first-quarter 2025 results on May 7.

TRMB’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 7.8%.

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