News

Johnson Controls International plc JCI reported second-quarter fiscal 2025 (ended March 2025) adjusted earnings of 82 cents per share, which beat the Zacks Consensus Estimate of 79 cents. The bottom line increased 19% year over year.

Total revenues (continuing operations) of $5.68 billion surpassed the consensus estimate of $5.64 billion. The top line increased 1.4% year over year, whereas organic revenues increased 7%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Johnson Controls International Price, Consensus and EPS Surprise

Johnson Controls International price-consensus-eps-surprise-chart | Johnson Controls International Quote

Q2 Segmental Results

Building Solutions North America: Revenues were $2.92 billion, up 6% year over year. Our estimate was $2.70 billion. Organic sales also increased 7%, driven by the strong performance of the applied heating, ventilation and air conditioning (HVAC) and controls businesses. Adjusted EBITA increased 5% year over year to $390 million.

Building Solutions Europe, Middle East, Africa/Latin America: Revenues totaled $1.09 billion, up 2% year over year. Our estimate was $1.07 billion. Organic sales climbed 5% due to growth in the service and fire and security businesses. Adjusted EBITA was $136 million, up 53% year over year.

Building Solutions Asia Pacific: Revenues increased 10% to $542 million. Our estimate was $531.5 million. Sales grew 13% organically, driven by growth in the service and systems businesses. Adjusted EBITA was $79 million, up 46% year over year.

Global Products: The segment reported revenues of $1.13 billion, down 13% year over year. Our estimate was $1.34 billion. Organic sales were up 8%, supported by strength in the Applied HVAC business and positive price and volume growth. Adjusted EBITA was $343 million, up 9% year over year.

JCI’s Margin Profile

In the fiscal second quarter, Johnson Controls’ cost of sales decreased 1.9% year over year to approximately $3.6 billion. Gross profit increased 7.5% year over year to $2.1 billion and the margin rose 220 basis points (bps) to 36.5%. Selling, general and administrative expenses were $1.4 billion, down 30.9% year over year.

Financial Position

Johnson Controls had cash and cash equivalents of $795 million as of March 31, 2025, compared with $606 million at the end of fiscal 2024 (ended Sept. 30, 2024). Long-term debt was $8.2 billion compared with $8 billion at the end of fiscal 2024.

In the first six months of fiscal 2025, the company generated net cash of $799 million from operating activities against $437 million used in the year-ago period. It reported a free cash flow of $589 million in the same period against a free cash outflow of $647 million in the year-ago period.

The company repurchased 8.2 million shares for approximately $660 million in the first six months of fiscal 2025.

JCI’s Q3 Guidance

Johnson Controls anticipates mid-single-digit organic revenue growth from the year-ago level. Adjusted segment EBITA margin is estimated to be approximately 17.5%. JCI expects adjusted earnings to be in the range of $0.97-$1.00 per share.

FY25 Guidance

Johnson Controls anticipates organic revenue growth to be in the mid-single-digit range from the prior-year level. Adjusted segment EBITA margin is expected to improve 90 bps from the year-ago actual. JCI expects adjusted earnings to be about $3.60 per share. It expects adjusted free cash flow conversion of approximately 100%.

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold). Some better-ranked companies are discussed below:

Insteel Industries IIIN currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

IIIN delivered a trailing four-quarter average earnings surprise of 122.4%. In the past 60 days, the Zacks Consensus Estimate for Insteel Industries’ fiscal 2025 earnings has increased 34.8%.

Unifirst Corporation UNF currently carries a Zacks Rank #2 (Buy). UNF delivered a trailing four-quarter average earnings surprise of 12.3%. In the past 60 days, the consensus estimate for Unifirst’s fiscal 2025 (ending August 2025) earnings has increased 4.1%.

AptarGroup, Inc. ATR presently carries a Zacks Rank of 2. ATR delivered a trailing four-quarter average earnings surprise of 7.3%. In the past 60 days, the consensus estimate for AptarGroup’s 2025 earnings has increased 2.5%.

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This article originally published on Zacks Investment Research (zacks.com).

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