U.S. Markets open in 6 hrs 49 mins

Johnson Controls (JCI) Q2 Earnings Beat, Revenues In Line

Zacks Equity Research

Johnson Controls International plc JCI has reported adjusted earnings per share of 32 cents in second-quarter fiscal 2019, surpassing the Zacks Consensus Estimate of 30 cents. In second-quarter fiscal 2018, earnings were 26 cents per share. The reported quarter witnessed solid organic revenue growth.

Operational Update

During the quarter under review, Johnson Controls reported revenues of $5.8 billion, up 3% year over year. Revenues were almost in line with the Zacks Consensus Estimate. In the quarter under review, the cost of sales increased to $3.94 billion from $3.81 billion in the year-ago quarter. Gross profit rose to $1.84 billion from $1.82 billion in the year-ago quarter.

Selling, general and administrative expenses in the fiscal second quarter totaled $1.46 billion, down from the prior-year quarter figure of $1.49 billion.

Johnson Controls International plc Price, Consensus and EPS Surprise

 

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

Segment Results

Building Solutions North America: This segment’s adjusted revenues were $2.19 billion, increasing from the year-ago quarter’s $2.10 billion. The segment’s EBITA increased to $259 million from $244 million in second-quarter fiscal 2018.

Building Solutions Europe, Middle East, Africa/Latin America: Adjusted revenues in this segment declined to $878 million from $907 million a year ago. Segment’s EBITA was $81 million, up from the second-quarter fiscal 2018 level of $78 million.

Building Solutions Asia Pacific: Adjusted revenues in this segment rose to $628 million from $586 million a year ago. This segment’s EBITA was $76 million, up from the second-quarter fiscal 2018 level of $71 million.

Global Products: Adjusted revenues in this segment rose to $2.09 billion from $2.04 billion a year ago. This segment’s EBITA was $255 million, up from the second-quarter fiscal 2018 level of $237 million.

Financial Position

Johnson Controls had cash and cash equivalents of $239 million as of Mar 31, 2019, up from $185 million as of Sep 30, 2018. Long-term debt declined to $8.41 billion in the quarter under review from $9.62 billion as of Sep 30, 2018.

In the reported quarter, the company repurchased 16 million shares for $533 million.

Guidance

The company anticipates fiscal 2019 adjusted EPS from continuing operations of $1.85-$1.95, marking a year-over-year increase of 16-23%.

Zacks Rank & Stocks to Consider

Johnson Controls currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the auto space are PACCAR, Inc. PCAR, SPX Corporation SPXC and AB Volvo VLVLY. PACCAR and SPX Corp currently carry a Zacks Rank #2 (Buy) while Volvo sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PACCAR has an expected long-term growth rate of 8.4%. The company’s stock has seen the Zacks Consensus Estimate for earnings in 2019 being revised 0.16% upward over the past 30 days.

SPX Corp has an expected current-year growth rate of 18.2%. The company’s stock has seen the Zacks Consensus Estimate for earnings in 2019 being revised 0.39% upward over the past 30 days.

Volvo has an expected long-term growth rate of 5%. The company’s stock has seen the Zacks Consensus Estimate for earnings in 2019 being revised 8.1% upward over the past 30 days.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.

See 7 breakthrough stocks now>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
PACCAR Inc. (PCAR) : Free Stock Analysis Report
 
AB Volvo (VLVLY) : Free Stock Analysis Report
 
Johnson Controls International plc (JCI) : Free Stock Analysis Report
 
SPX Corporation (SPXC) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research