Johnson Controls (JCI) Q1 Earnings Beat, Revenues In Line

Johnson Controls International plc (NYSE:JCI) has reported adjusted earnings per share of 26 cents in first-quarter fiscal 2019, surpassing the Zacks Consensus Estimate of 24 cents. In first-quarter fiscal 2018, earnings were 21 cents per share. Adjusted for non-recurring items, earnings in first-quarter fiscal 2018 were 54 cents. The reported quarter witnessed solid organic revenue growth, with sustained momentum in orders and backlogs.

Operational Update

During the quarter under review, Johnson Controls reported revenues of $5.5 billion, almost in line with the Zacks Consensus Estimate. In the quarter under review, the cost of sales increased to $3.74 billion from $3.61 billion in the year-ago quarter. Gross profit rose to $1.73 billion from $1.70 billion in the year-ago quarter.

Selling, general and administrative expenses in the fiscal first quarter totaled $1.44 billion, up from the prior-year quarter figure of $1.32 billion.

Segment Results

Building Solutions North America: This segment’s adjusted revenues were $2.13 billion, increasing from the year-ago quarter’s $2 billion. The segment’s EBITA increased to $253 million from $236 million in first-quarter fiscal 2018.

Building Solutions Europe, Middle East, Africa/Latin America: Adjusted revenues in this segment declined to $907 million from $915 million a year ago. Segment’s EBITA was $77 million, up from the first-quarter fiscal 2018 level of $711 million.

Building Solutions Asia Pacific: Adjusted revenues in this segment rose to $613 million from $597 million a year ago. Segment’s EBITA was $66 million, down from the first-quarter fiscal 2018 level of $74 million.

Global Products: Adjusted revenues in this segment rose to $1.83 billion from $1.78 billion a year ago. Segment’s EBITA was $194 million, up from first-quarter fiscal 2018 level of $178 million.

Financial Position

Johnson Controls had cash and cash equivalents of $292 million as of Dec 31, 2018, up from $185 million as of Sep 30, 2018. Long-term debt declined to $9.59 billion in the quarter under review from $9.62 billion as of Sep 30, 2018.

In the reported quarter, the company repurchased 14 million shares for $467 million.

Guidance

Johnson Controls anticipates fiscal 2019 adjusted EPS from continuing operations of $1.75-$1.85, marking a year-over-year increase of 10-16%.

Zacks Rank & Stocks to Consider

Johnson Controls currently carries a Zacks Rank #5 (Strong Sell).

A few better-ranked stocks in the auto space are Dana Incorporated (NYSE:DAN) , Oshkosh Corporation (NYSE:OSK) and General Motors Company (NYSE:GM) , each currently carrying Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dana has an expected long-term growth rate of 2.9%. Over the past three months, shares of the company have risen 14.5%.

Oshkosh has an expected long-term growth rate of 14.6%. Over the past three months, shares of the company have surged 10.1%.

General Motors has an expected long-term growth rate of 8.5%. Over the three months, shares of the company have risen 6.8%.

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