Johnson Controls (JCI) Misses on Q2 Earnings & Revenues - Tale of the Tape
Johnson Controls Inc. (JCI) is a supplier of automotive interiors, batteries, and other control equipment. The company is gaining from its market expansion in China. It anticipates significant growth opportunities in China and hence, plans to invest in the Chinese market this year. In addition, Johnson Controls will benefit from the acquisitions and mergers that it undertakes to provide customers with world-class technologies through strong complementary brands and channels.
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. Moreover, Original Equipment manufacturers (OEMs) are continuously pressurizing suppliers such as Johnson Controls to reduce prices. If the company is unable to offset the pricing reductions through improved operating efficiencies and reduced expenditures, it will adversely affect the results. Due to this, investors are eagerly awaiting Johnson Controls’ earnings report.
Estimate Trend & Surprise History
Investors should note that the second-quarter (ended Mar 31, 2015) earnings estimate for Johnson Controls has decreased by 2 cents to 74 cents over the past 7 days.
Johnson Controls has delivered a flurry of positive earnings surprises. It has beaten the Zacks Consensus Estimate in 3 of the trailing 4 quarters with a positive average beat of 1.62%.
Earnings
Johnson Controls delivered 20% year over year increase in adjusted earnings to 73 cents per share, missing the Zacks Consensus Estimate of 75 cents.
Revenues
Johnson Controls reported revenues of $9.2 billion, down 3% year over year. However, revenues missed the Zacks Consensus Estimate of $10.1 billion.
Key Stats/Developments to Note
In the second quarter of 2015, Johnson Controls announced an agreement to sell its Global WorkPlace Solutions (GWS) business to CBRE Group, Inc. for $1.475 billion. GWS will be reported as a discontinued operation from the second quarter of fiscal 2015.
Johnson Controls expects earnings per share in the third quarter to be in the range of 90 cents to 92 cents up 14% to 16%, while in the fiscal year 2015 it should be in the band of $3.30 to $3.45 representing a year over year increase of 10% to 15%.
Zacks Rank
Currently, Johnson Controls has a Zacks Rank #3 (Hold), but that could change following its earnings report which has just released.
Market Reaction
Johnson Controls’ shares were inactive following the release. It would be interesting to see how the market reacts to the results during the trading session today.
Check back later for our full write up on Johnson Controls’ earnings report!
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