Johnson Controls International PLC Reports Q4 and FY23 Results: Solid Sales Growth and Steady ...
Q4 reported sales increased by 3% and organic sales by 2%; full year reported sales up by 6% and organic sales by 8%.
Q4 GAAP EPS of $0.80; Adjusted EPS of $1.05, marking a 6% increase from the previous year.
Record backlog of $12.1 billion, a 9% organic increase year-over-year.
Full year Adjusted EPS of $3.50, up 17% from the previous year, including a $0.04 headwind from a cyber incident.
On December 12, 2023, Johnson Controls International PLC (NYSE:JCI) released its 8-K filing, announcing Q4 and full-year fiscal 2023 results. The company reported a solid performance with a 3% increase in Q4 reported sales compared to the previous year, reaching $6.9 billion. Organic sales, which exclude the impact of acquisitions, divestitures, and foreign currency, grew by 2% in Q4 and 8% for the full year.
Financial Performance Highlights
Johnson Controls reported a Q4 GAAP EPS of $0.80 and an adjusted EPS of $1.05, which is a 6% increase over the prior year. The adjusted EPS includes a $0.04 headwind from a recent cyber incident. For the full fiscal year, the GAAP EPS was $2.69, with an adjusted EPS of $3.50, representing a 17% increase from the previous year. The company's net income from continuing operations was $549 million in Q4, with adjusted net income reaching $719 million, a 5% increase year-over-year.
The company's EBIT for Q4 was $587 million with an EBIT margin of 8.5%. Adjusted EBIT was $936 million, and the adjusted EBIT margin remained flat at 13.6% compared to the prior year. Johnson Controls ended the fiscal year with a record backlog of $12.1 billion, a 9% organic increase year-over-year, demonstrating strong order momentum.
Segment Performance
Building Solutions North America saw an 8% increase in sales, with segment EBITA growing by 13% and margin expansion of 70 basis points. However, Building Solutions EMEA/LA experienced a decline in segment EBITA by 11%, with margin contraction of 160 basis points. The Asia Pacific segment faced a 7% decline in sales and an 11% decrease in segment EBITA. Global Products sales declined by 2%, with adjusted segment EBITA down by 6%.
Operational and Strategic Developments
Chairman and CEO George Oliver commented on the company's strategy, stating,
Our fiscal 2023 results, highlighted by strong sales growth and margin expansion, further validate that our strategy of providing solutions that make buildings smarter, healthier, and more sustainable continues to gain momentum."
CFO Olivier Leonetti added,
Our resilient backlog continues to grow as we saw strong order growth in both our Install and Service businesses throughout the fiscal year."
During Q4, Johnson Controls repurchased 0.2 million shares for approximately $12 million and completed a $105 million cash tender offer for a portion of its outstanding 5.125% Senior Notes due 2045. The company also recorded net pre-tax mark-to-market losses of $108 million related primarily to the remeasurement of pension and postretirement benefit plans.
Looking Forward
For fiscal 2024, Johnson Controls has initiated guidance with an expectation of flat organic revenue year-over-year for the first quarter and an adjusted segment EBITA margin of approximately 13.0%. The full year guidance anticipates organic revenue growth in the mid-single digits, an adjusted segment EBITA margin improvement of 25+ basis points, and an adjusted EPS before special items of approximately $3.65 to $3.80.
Johnson Controls will host a conference call to discuss the quarter's results and has made the accompanying slide presentation available on the investor relations section of its website.
For a detailed analysis of Johnson Controls International PLC's financial results, including reconciliations of non-GAAP measures, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Johnson Controls International PLC for further details.
This article first appeared on GuruFocus.
