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Johnson Controls (JCI) Q1 Earnings Beat Estimates, Up Y/Y

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Zacks Equity Research
·4-min read
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Johnson Controls International plc JCI reported adjusted earnings per share of 40 cents in first-quarter fiscal 2020, surpassing the Zacks Consensus Estimate of 38 cents. The reported figure also comes in higher than the prior-year quarter earnings of26 cents per share. This outperformance wasmainly aided by higherrevenues and EBITA across all its segments.

Johnson Controls reported revenues of $5,576 million, up 2% year over year, in the first quarter. The revenue figure also beat the Zacks Consensus Estimate of $5,547 billion. Gross profit increased to $1.8 billion from the year-earlier quarter’s $1.72 billion.

Selling, general and administrative expenses in the fiscal first quarter totaled $1,427 million, lower than the prior-year quarter’s $1,438 million.

Johnson Controls International plc Price, Consensus and EPS Surprise

Johnson Controls International plc Price, Consensus and EPS Surprise
Johnson Controls International plc Price, Consensus and EPS Surprise

Johnson Controls International plc price-consensus-eps-surprise-chart | Johnson Controls International plc Quote

Segmental Results

Building Solutions North America: This segment’s adjusted revenues were $2,167 million, up from the year-ago quarter’s $2,116 millionon strong growth in HVAC & Controls and Fire & Security. The segment’s EBITA rose to $259 million from the $253 million reported in first-quarter fiscal 2019onfavorable volume leverage, and cost synergies and productivity savings.

Building Solutions Europe, Middle East, Africa/Latin America: Adjusted revenues in this segment was $928 million, up 2.3% year over year, owing to solid growth in project installations and service. Segment’s EBITA was $90 million, up from the first-quarter fiscal 2019 level of $77 million. This upswing was mainly driven by favorable volume as well as cost synergies and productivity savings.

Building Solutions Asia Pacific: Adjusted revenues rose to $629 million from the year-ago quarter’s $613 million on growth in project installations, particularly in Fire & Security. This segment’s EBITA was $72 million, up from the first-quarter fiscal 2019 level of $66 million, owing to solid volume as well as cost synergies and productivity savings.

Global Products: Adjusted revenues in this segment increased to $1,852 million from the prior year’s $1,828 million, mainly driven by robust growth in Building Management Systems and to a lesser extent, Specialty Products. This segment’s EBITA was $204 million, up from the first-quarter fiscal 2019 level of $194 million, mainly aided by positive price/cost as well as cost synergies and productivity savings.

Financial Position

Johnson Controls had cash and cash equivalents of $2.16 billion as of Dec 31, 2019, down from $2.81 million as of Sep 30, 2019. Long-term debt declined to $5.92 billion in the quarter from $6.71 billion as of Sep 30, 2019. The debt-to-capital ratio stands at 27.36%.

In the reported quarter, the company repurchased 15 million shares for $651 million.

2020 Guidance

The company reaffirmed its fiscal 2020 adjusted EPS from continuing operations of $2.50-$2.60, suggesting a 28-33% increase from the year-ago reported figure.

Zacks Rank & Other Stocks to Consider

Johnson Controls currently carries a Zacks Rank #2 (Buy).

Other top-ranked stocks in the Auto-Tires-Trucks sector include Gentex Corporation GNTX, Blue Bird Corporation BLBD and SPX Corporation SPXC, each carrying a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Gentex Corporation has an estimated earnings growth rate of 7.32% for 2020. The company’s shares have appreciated 50.2% in a year’s time.

Blue Bird has a projected earnings growth rate of 25.47% for the ongoing year. Its shares have gained 2.6% over the past year.

SPX has an expected earnings growth rate of 8.09% for the current year. The stock has rallied 69.5% in the past year.

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