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Johnson Controls Q2 EPS jumped 45.1% and topped estimates, while revenues rose 8%.
JCI saw strong HVAC and services demand drive growth across Americas, EMEA and APAC.
Company raised FY2026 EPS outlook to $4.85 and now expects about 6% organic growth.
Johnson Controls International plc (JCI - Free Report) reported second-quarter fiscal 2026 (ended March 2026) adjusted earnings of $1.19 per share, which beat the Zacks Consensus Estimate of $1.12. The bottom line increased 45.1% year over year.
Total revenues (continuing operations) of $6.14 billion surpassed the consensus estimate of $6.10 billion in the quarter. The top line increased 8% year over year, whereas organic revenues increased 6%.
Q2 Segmental Results
Effective from the third quarter of fiscal 2025, the company started reporting under three segments, namely Americas, EMEA and APAC.
Americas: Revenues were $4.12 billion, up 7% year over year. Organic sales also increased 7%, driven by the strong performance of the applied heating, ventilation and air conditioning (HVAC) and services businesses. Adjusted segment EBITA increased 13% year over year to $802 million.
EMEA: Revenues totaled $1.28 billion, up 7% year over year. Organic sales rose 1% due to strong growth in the products and systems business. Adjusted EBITA was $191 million, up 41% year over year.
APAC: Revenues increased 16% to $739 million. Sales rose 13% organically, due to strength in the applied HVAC business. Adjusted EBITA was $146 million, up 40% year over year.
Johnson Controls International Price, Consensus and EPS Surprise
In the fiscal second quarter, Johnson Controls’ cost of sales increased 7.5% year over year to approximately $3.88 billion. Gross profit increased 9.3% year over year to $2.26 billion and the margin rose 30 basis points (bps) to 36.8%. Selling, general and administrative expenses were $1.40 billion, down 1.8% year over year.
Financial Position
Johnson Controls had cash and cash equivalents of $698 million as of March 31, 2026, compared with $379 million at the end of fiscal 2025 (ended Sept. 30, 2025). Long-term debt was $8.61 billion compared with $8.59 billion at the end of fiscal 2025.
In the fiscal second quarter, the company generated net cash of $672 million from operating activities compared with $550 million in the year-ago quarter. It reported a free cash flow (on an adjusted basis) of $526 million in the same period compared with $463 million in the year-ago period.
The company paid dividends worth $244 million and repurchased shares worth $215 million in the fiscal second quarter.
Q3 Guidance
Johnson Controls anticipates organic revenue growth of approximately 6% from the year-ago level. Operating leverage is estimated to be approximately 50%. It expects adjusted earnings to be about $1.28 per share.
FY26 Guidance
Johnson Controls currently anticipates organic revenue growth to be about 6% from the prior-year level compared with mid-single-digit growth expected earlier. Operating leverage is expected to be about 50%. It expects adjusted earnings per share to be approximately $4.85, higher than $4.70 projected previously. It expects adjusted free cash flow conversion of about 100%.
JCI’s Zacks Rank and Other Stocks to Consider
The company currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks are discussed below:
DXP Enterprises’ earnings surpassed the consensus estimate by 52.8% in the last reported quarter. In the past 60 days, the Zacks Consensus Estimate for DXPE’s 2026 earnings has increased by 17.2%.
Kennametal (KMT - Free Report) presently sports a Zacks Rank of 1. Kennametal’s earnings surpassed the consensus estimate thrice and missed once in the trailing four quarters. The average earnings surprise was 35.4%. In the past 60 days, the Zacks Consensus Estimate for Kennametal’s fiscal 2026 earnings has increased 9%.
Powell Industries (POWL - Free Report) currently carries a Zacks Rank of 2. Powell’s earnings topped the consensus estimate thrice and missed once in the trailing four quarters. The average earnings surprise was 7.8%. In the past 60 days, the Zacks Consensus Estimate for Powell’s fiscal 2026 earnings has increased 4.7%.
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Johnson Controls Tops Q2 Earnings & Revenue Estimates, Raises FY26 View
Key Takeaways
Johnson Controls International plc (JCI - Free Report) reported second-quarter fiscal 2026 (ended March 2026) adjusted earnings of $1.19 per share, which beat the Zacks Consensus Estimate of $1.12. The bottom line increased 45.1% year over year.
Total revenues (continuing operations) of $6.14 billion surpassed the consensus estimate of $6.10 billion in the quarter. The top line increased 8% year over year, whereas organic revenues increased 6%.
Q2 Segmental Results
Effective from the third quarter of fiscal 2025, the company started reporting under three segments, namely Americas, EMEA and APAC.
Americas: Revenues were $4.12 billion, up 7% year over year. Organic sales also increased 7%, driven by the strong performance of the applied heating, ventilation and air conditioning (HVAC) and services businesses. Adjusted segment EBITA increased 13% year over year to $802 million.
EMEA: Revenues totaled $1.28 billion, up 7% year over year. Organic sales rose 1% due to strong growth in the products and systems business. Adjusted EBITA was $191 million, up 41% year over year.
APAC: Revenues increased 16% to $739 million. Sales rose 13% organically, due to strength in the applied HVAC business. Adjusted EBITA was $146 million, up 40% year over year.
Johnson Controls International Price, Consensus and EPS Surprise
Johnson Controls International price-consensus-eps-surprise-chart | Johnson Controls International Quote
Margin Profile
In the fiscal second quarter, Johnson Controls’ cost of sales increased 7.5% year over year to approximately $3.88 billion. Gross profit increased 9.3% year over year to $2.26 billion and the margin rose 30 basis points (bps) to 36.8%. Selling, general and administrative expenses were $1.40 billion, down 1.8% year over year.
Financial Position
Johnson Controls had cash and cash equivalents of $698 million as of March 31, 2026, compared with $379 million at the end of fiscal 2025 (ended Sept. 30, 2025). Long-term debt was $8.61 billion compared with $8.59 billion at the end of fiscal 2025.
In the fiscal second quarter, the company generated net cash of $672 million from operating activities compared with $550 million in the year-ago quarter. It reported a free cash flow (on an adjusted basis) of $526 million in the same period compared with $463 million in the year-ago period.
The company paid dividends worth $244 million and repurchased shares worth $215 million in the fiscal second quarter.
Q3 Guidance
Johnson Controls anticipates organic revenue growth of approximately 6% from the year-ago level. Operating leverage is estimated to be approximately 50%. It expects adjusted earnings to be about $1.28 per share.
FY26 Guidance
Johnson Controls currently anticipates organic revenue growth to be about 6% from the prior-year level compared with mid-single-digit growth expected earlier. Operating leverage is expected to be about 50%. It expects adjusted earnings per share to be approximately $4.85, higher than $4.70 projected previously. It expects adjusted free cash flow conversion of about 100%.
JCI’s Zacks Rank and Other Stocks to Consider
The company currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks are discussed below:
DXP Enterprises (DXPE - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
DXP Enterprises’ earnings surpassed the consensus estimate by 52.8% in the last reported quarter. In the past 60 days, the Zacks Consensus Estimate for DXPE’s 2026 earnings has increased by 17.2%.
Kennametal (KMT - Free Report) presently sports a Zacks Rank of 1. Kennametal’s earnings surpassed the consensus estimate thrice and missed once in the trailing four quarters. The average earnings surprise was 35.4%. In the past 60 days, the Zacks Consensus Estimate for Kennametal’s fiscal 2026 earnings has increased 9%.
Powell Industries (POWL - Free Report) currently carries a Zacks Rank of 2. Powell’s earnings topped the consensus estimate thrice and missed once in the trailing four quarters. The average earnings surprise was 7.8%. In the past 60 days, the Zacks Consensus Estimate for Powell’s fiscal 2026 earnings has increased 4.7%.