Will Johnson Controls (JCI) Miss Q4 Earnings Estimates?
Johnson Controls Inc. (JCI) is set to report fourth-quarter (ended) fiscal 2014 results on Oct 30. In the last quarter, it had posted a positive earnings surprise of 2.44%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
Johnson Controls projects higher sales and earnings in fiscal 2014, based on its leading market position in core businesses and strong overall performance. The company anticipates earnings in the range of $1.00–$1.02 in the fourth quarter, reflecting an 11% rise from the year-ago quarter. Meanwhile, the company expects earnings per share in the band of $3.10 to $3.15 for fiscal 2014. Revenues are likely to improve 3% to $43.8 billion in fiscal 2014, driven by growth across all business segments. Revenues will benefit from higher automotive production in all locations compared to the 2013 level, with 11% improvement in China, 6% in North America and 2% in Europe.
However, Johnson Controls faces strong competition from major domestic and international manufacturers and distributors of lead-acid batteries, particularly in North America, Europe and Asia.
Earnings Whispers?
Our proven model does not conclusively show that Johnson Controls is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: Johnson Controls’ Earnings ESP is -0.99% as the Most Accurate estimate stands at $1.00 while the Zacks Consensus Estimate is $1.01 per share.
Zacks Rank: Johnson Controls currently has a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Gentherm Incorporated (THRM) has an Earnings ESP of +4.65% and a Zacks Rank #1 (Strong Buy). The company will report its third-quarter 2014 results on Oct 30.
Meritor, Inc. (MTOR) has an Earnings ESP of +37.5% and a Zacks Rank #3 (Hold). It will release its third-quarter earnings results on Nov 12.
Advance Auto Parts Inc. (AAP) has an Earnings ESP of +0.54% and a Zacks Rank #3. The company’s third-quarter financial results are scheduled to release on Nov 6.
Read the Full Research Report on JCI
Read the Full Research Report on AAP
Read the Full Research Report on THRM
Read the Full Research Report on MTOR
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