MILWAUKEE, Sept. 18, 2024 /PRNewswire/ -- Johnson Controls, the global leader for smart, healthy and sustainable buildings, today launched a highly anticipated update to the company's industry-leading Building Automation System (BAS), Metasys, which serves the needs of commercial, industrial and institutional buildings, regardless of industry.Metasys 14.0 is designed to elevate a commercial building’s overall performance and sustainability while enhancing occupant comfort, health and safety.The new iteratio ...

The AI revolution is spurring investment in data centers, and that's adding to the growth prospects of this industrial company.It's no secret that Nvidia's (NVDA -1.95%) stock price has surged in recent years thanks largely to its association with artificial intelligence (AI), particularly the massive spending being done to expand data center computing power. Along with the price surge has come a surge in valuation for the stock.If you are the type of investor who doesn't like buying hot stocks at hefty val ...

Johnson Controls International PLC JCI is scheduled to report its fiscal fourth-quarter results on Dec. 10, after having delivered an earnings beat for the previous quarter. While the company has significant exposure to data centers, among the more profitable verticals, the naming of its new CEO is likely to act as a catalyst for the stock, according to BofA Securities.Analyst Andrew Obin upgraded the rating for Johnson Controls International from Neutral to Buy, while raising the price target from $76 to $ ...

Strategic Focus - Johnson Controls is refining its portfolio by selling its residential HVAC business, aiming to position itself as a "Comprehensive Solutions Provider for Commercial Buildings" [1] - The company's comprehensive solutions include HVAC, fire safety, controls, security, and related services, with approximately 10% of the business still non-core after pending transactions [1] - Further divestitures are expected in the coming quarters to streamline the portfolio [1] Business Strategy and Growth - Johnson Controls is shifting from selling individual services to offering comprehensive solutions, including its OpenBlue Platform, which enables data-driven smart building services [3] - The Smart Building market is projected to grow at an annual rate of 11% through the decade, with a focus on outcome-based solutions that save building operators money over time [3] - The company has launched 8 OpenBlue Innovation Centers to educate customers and business channel partners on the benefits of connected solutions [3] - Johnson Controls' ability to sell and service a comprehensive suite of solutions provides a unique competitive advantage, as competitors primarily focus on single equipment or digital capabilities [3] Financial Performance and Valuation - Johnson Controls is trading at approximately 20 times FY 2024 free cash flow, with a free cash flow yield of around 5% [5] - The residential HVAC divestment is expected to free up several billion dollars in FY 2025 for share repurchases, with margins and profitability improving [5] - The company is projected to earn $5 per share in FY 2025, significantly above consensus, with potential for 15% to 20% annual earnings growth [5] - The stock is consolidating and appears poised for a breakout, with a reasonable 12 to 18-month target of $90, representing 25% upside [6][8] Operational and Strategic Execution - Johnson Controls has reduced its manufacturing facilities by over 25% through the sale of its Air Distribution Technologies business, improving its margin profile [4] - The company's Asia Pacific sales have stagnated, but an upturn in China or a weaker U.S. dollar could serve as a catalyst for growth [4] - The strategic shift towards comprehensive solutions is progressing, with real data showing increased connectivity and additional services being added to the installed base [4] Cybersecurity and Management - A 2023 cybersecurity breach raised concerns, particularly for a company in the building security business, highlighting the need for a strong cybersecurity culture [7] - The company is increasing its cybersecurity spending, but the effectiveness of these measures remains to be seen [7] - The selection of a new CEO with relevant experience will be critical to the company's strategic success and cybersecurity capabilities [7]

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Johnson Controls International plc (JCI) reported third-quarter fiscal 2024 (ended June 2024) adjusted earnings of $1.14 per share, which beat the Zacks Consensus Estimate of $1.08. The bottom line increased 11% year over year.Total revenues of $7.2 billion missed the consensus estimate of $7.4 billion. The top line increased 1% year over year while organic revenues inched up 3%.Segmental ResultsBuilding Solutions North America: Revenues were $2.9 billion, up 9% year over year. Our estimate was $2.9 billion ...

Financial Data and Key Metrics - Organic sales growth was 3%, in line with the guidance of low single-digits [6] - Segment margin expanded by 150 basis points to 17.9%, exceeding the guidance of 17% [7] - Free cash flow generation was more than $500 million higher than the comparable period one year ago [7] - Orders grew 5% during the quarter, with backlog increasing by 10% [7][8] - Adjusted EPS of $1.14 was up 11% year-over-year, exceeding the high end of the guidance range by $0.04 [20] - Net debt decreased to 2.3 times, within the long-term target range of 2 to 2.5 times [20] - Adjusted free cash flow improved approximately $700 million year-over-year to $1.3 billion [20] Business Line Performance - Service led with 9% growth, validating the company's transformation efforts [7] - Global Products business grew 3% year-over-year, with Commercial HVAC growing mid-single digits [21] - Fire & Security declined low single-digit, while Industrial Refrigeration grew approximately 20% [21] - Building Solutions orders grew 5%, with service orders up 12% and systems orders up 2% [22] - North America sales grew 8% organically, with HVAC & Controls up over 20% year-over-year [23] - EMEA/LA orders grew 11%, with service up over 25% [24] - Asia Pacific sales declined 19%, primarily due to weakness in China's systems business [26] Market Performance - North America system business grew 9%, while service grew 6% [23] - EMEA/LA sales grew 8% organically, with service up 15% year-over-year [24] - Asia Pacific service business grew 8%, despite a 19% decline in overall sales [26] Strategic Direction and Industry Competition - The company is transforming into a pure-play provider of comprehensive solutions for commercial buildings, focusing on commercial HVAC, fire, controls, security, and services [13][14] - Data center exposure increased to nearly 10% of sales, up from 7% in fiscal year 2023, with expectations for further growth [14] - The company announced divestitures of its Residential and Light Commercial HVAC business and Air Distribution Technologies business, representing roughly 20% of current sales [8][11] - The company is focusing on delivering safe, healthy, and sustainable buildings, leveraging integrated domain expertise and an extensive branch network [15][16] Management Commentary on Operating Environment and Future Outlook - The company is tightening its full-year adjusted EPS guidance to a range of $3.66 to $3.69 [10] - The company expects strong double-digit growth in the data center vertical, with robust demand continuing to accelerate over the next few years [32][33] - The company is confident in its ability to deliver sustainable long-term growth, driven by a resilient service business and continued demand in North America's system business [26][27] Other Important Information - The company initiated a CEO succession plan, with George Oliver remaining as Chairman of the Board to facilitate a smooth transition [9] - Patrick Decker was appointed to the Board of Directors, bringing experience in leading a transformation at his prior company [10] - The company expects to report the Residential and Light Commercial HVAC business in discontinued operations beginning in the fiscal fourth quarter of 2024 [12] Q&A Session Summary Question: Impact of data center growth on backlog - Data center backlog is expected to grow strongly, with the business now representing about 10% of sales, up from 7% a year ago [32][33] - The company expects strong double-digit growth in the data center vertical, with multiyear agreements contributing to large orders [89] Question: Long-term growth outlook and Fire & Security business - The company expects mid-single-digit growth in the long term, driven by mid- to high single-digit growth in the service business and mid-single-digit growth in the systems business [41] - Fire & Security is expected to maintain mid-single-digit growth, with the service and recurring component driving higher growth [42] Question: CEO succession timeline and Board appointment - The CEO succession plan is underway, with both internal and external candidates being considered [45] - Patrick Decker's appointment to the Board reflects the company's commitment to refreshing the Board with relevant skills and experience [10][45] Question: Free cash flow and capital deployment - The company expects adjusted free cash flow conversion of approximately 85% or better for the full year [27] - Proceeds from divestitures will be used for share repurchases, debt paydown, and restructuring to offset stranded costs [29][68] Question: Asia Pacific recovery and backlog growth - The company expects a recovery in Asia Pacific in fiscal year 2025, with sequential improvement in orders and backlog [71][72] - The company remains disciplined in its approach to the Chinese market, focusing on attractive opportunities and counterparties [72] Question: Portfolio changes and leverage strategy - The company plans to return most of the net proceeds from divestitures to shareholders through share repurchases, while maintaining its investment-grade rating [68] - The company is confident in its ability to deliver consistent, predictable results following the portfolio transformation [30] Question: Data center and liquid cooling technologies - The company is well-positioned in the data center market, with investments in liquid cooling technologies and partnerships to provide full solutions [80][81] Question: CEO search attributes - The company is looking for a CEO with strong operating experience, domain expertise, and the ability to lead the next phase of growth [84][85] Question: Order acceleration and pipeline visibility - The company expects lumpiness in orders due to the data center vertical, with large multiyear orders contributing to growth [87][89] Question: Fourth-quarter EBITA margin visibility - The company has strong visibility into the 19% EBITA margin for the fourth quarter, driven by backlog conversion and improved productivity [92]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From _____ To _____ Commission File Number: 001-13836 JOHNSON CONTROLS INTERNATIONAL PLC (Exact name of registrant as specified in its charter) | --- | --- | --- | |---------- ...

Johnson Controls (JCI) came out with quarterly earnings of $1.14 per share, beating the Zacks Consensus Estimate of $1.08 per share. This compares to earnings of $1.03 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 5.56%. A quarter ago, it was expected that this diversified technology and industrial company would post earnings of $0.75 per share when it actually produced earnings of $0.78, delivering a surprise of 4%.Over the ...

Sales Performance - Q3 reported sales increased 1% and 3% organically, with sales of $7.2 billion[2] - Building Solutions North America sales increased 9% to $2.9 billion, with organic sales up 8%[4] - Building Solutions EMEA/LA sales increased 3% to $1.1 billion, with organic sales up 8%[6] - Building Solutions Asia Pacific sales declined 22% to $575 million, with organic sales down 19%[8] - Global Products sales were flat at $2.7 billion, with organic sales up 3%[10] - Net sales for products and systems in the three months ended June 30, 2024, were $5,422 million, compared to $5,431 million in the same period in 2023[24] - Services revenue for the three months ended June 30, 2024, increased to $1,809 million from $1,702 million in the same period in 2023[24] - Net sales for Q2 2024 were $7,231 million, up 1% from $7,133 million in Q2 2023[40] - Organic sales growth for Q2 2024 was 3%, with North America growing 8% and EMEA/LA growing 8%, while Asia Pacific declined 19%[40] - Net sales for 2024 reached $20,024 million, with a growth of 1% compared to the previous year[42] - North America net sales grew by 8% to $8,125 million, while Asia Pacific net sales declined by 23% to $1,573 million[42] - Products and systems revenue for 2024 totaled $5,422 million, with a slight decline of 1% in Asia Pacific[44] - Service revenue for 2024 increased by 6% to $1,809 million, driven by strong growth in North America and EMEA/LA[47] - Adjusted base net sales for 2024 were $19,616 million, reflecting organic growth of 1%[42] - Global Products revenue for 2024 was $7,143 million, showing a slight decline of 1%[42] - Acquisitions contributed $135 million to net sales in 2024[42] - Organic growth in service revenue was 9%, reaching $1,809 million in 2024[47] Earnings and Profitability - Q3 GAAP EPS of $1.45; Q3 Adjusted EPS of $1.14[1] - Gross profit for the three months ended June 30, 2024, was $2,488 million, up from $2,431 million in the same period in 2023[24] - Net income attributable to Johnson Controls for the three months ended June 30, 2024, was $975 million, compared to $1,049 million in the same period in 2023[24] - Earnings per share (diluted) for the three months ended June 30, 2024, were $1.45, compared to $1.53 in the same period in 2023[24] - Net income attributable to Johnson Controls for Q2 2024 was $975 million, compared to $1,049 million in Q2 2023, a decrease of 7.1%[28] - Adjusted net income attributable to JCI (non-GAAP) for Q2 2024 was $769 million, a 8.9% increase from $706 million in Q2 2023[52] - Net income attributable to JCI for Q2 2024 was $975 million, a 7.1% decrease from $1,049 million in Q2 2023[55] - Diluted earnings per share (non-GAAP) for Q2 2024 was $1.14, compared to $1.03 in Q2 2023, representing a 10.7% increase[63] Cash Flow and Financial Position - Free cash flow was $922 million, and adjusted free cash flow was $1.3 billion[13] - Cash and cash equivalents as of September 30, 2023, were $835 million[26] - Cash provided by operating activities for Q2 2024 was $1,021 million, up 25.6% from $813 million in Q2 2023[28] - Capital expenditures for Q2 2024 were $99 million, down 10.8% from $111 million in Q2 2023[28] - Free cash flow for the three months ended June 30, 2024, was $922 million, with a free cash flow conversion rate of 95%[51] - Free cash flow for the nine months ended June 30, 2024, was $248 million, with a conversion rate of 23%[51] - Free cash flow (non-GAAP) for Q2 2024 was $922 million, compared to $702 million in Q2 2023, representing a 31.3% increase[52] - Adjusted free cash flow (non-GAAP) for Q2 2024 was $1,263 million, up 70.4% from $741 million in Q2 2023[52] - Total assets as of June 30, 2024, were $43,325 million, up from $42,242 million as of September 30, 2023[26] - Short-term debt increased to $1,523 million as of June 30, 2024, from $385 million as of September 30, 2023[26] - Long-term debt as of June 30, 2024, was $7,867 million, compared to $7,818 million as of September 30, 2023[26] - Shareholders' equity attributable to Johnson Controls decreased to $15,968 million as of June 30, 2024, from $16,545 million as of September 30, 2023[26] - Total debt increased to $10,388 million in June 2024 from $9,764 million in June 2023[69] - Net debt increased to $9,526 million in June 2024 from $8,707 million in June 2023[69] - Net debt to income before income taxes ratio increased to 5.2x in June 2024 from 4.9x in June 2023[69] - Net debt to adjusted EBITDA ratio increased to 2.4x in June 2024 from 2.1x in June 2023[69] - Adjusted EBITDA (non-GAAP) increased to $4,210 million in June 2024 from $4,078 million in June 2023[72] Segment Performance - Building Solutions backlog of $12.9 billion increased 10% organically year-over-year[1] - Building Solutions North America segment EBITA for Q2 2024 was $521 million, up 35.3% from $385 million in Q2 2023[55] - Global Products segment EBITA for Q2 2024 was $655 million, a 10.5% increase from $593 million in Q2 2023[55] - Building Solutions North America segment EBITA for the nine months ended June 30, 2024 was $1,179 million, up 21.9% from $967 million in the same period of 2023[59] - Global Products segment EBITA for the nine months ended June 30, 2024 was $1,453 million, a 0.7% decrease from $1,463 million in the same period of 2023[59] Guidance and Forecast - Q4 guidance: Organic sales expected to increase ~7% year-over-year, adjusted EPS of ~$1.23 to $1.26[16] - Full-year 2024 guidance tightened: Organic sales growth up ~3%, adjusted EPS of ~$3.66 to $3.69[16] Adjusted Financial Measures - Adjusted free cash flow excludes impacts of discontinued accounts receivables factoring programs and JC Capital cash flows[32] - Adjusted financial measures exclude items like restructuring costs, impairment costs, and cyber incident costs[34][36] - Net debt to adjusted EBITDA is used as a measure of the company's financial condition and reliance on external debt financing[38] - Adjusted corporate expense (non-GAAP) for Q2 2024 was $119 million, up 52.6% from $78 million in Q2 2023[60] Other Financial Metrics - The company incurred costs related to a cybersecurity incident in September 2023, net of insurance recoveries[36] - A product quality issue in the Global Products segment resulted in significant remediation costs[37] - Basic weighted average shares outstanding decreased to 670.3 million in Q3 2024 from 683.3 million in Q3 2023[67] - Diluted weighted average shares outstanding decreased to 672.8 million in Q3 2024 from 686.2 million in Q3 2023[67] - Effective tax rate was approximately 13.75% for the three and nine months ending June 30, 2024[73]