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A month has gone by since the last earnings report for Johnson Controls (JCI). Shares have added about 10.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Johnson Controls due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Johnson Controls Q3 Earnings Surpass Estimates, Up Y/Y
Johnson Controls reported adjusted earnings per share of 67 cents in third-quarter fiscal 2020, handily outpacing the Zacks Consensus Estimate of 50 cents. The reported figure also comes in higher than the prior-year quarter’s 65 cents per share. This outperformance has been mainly aided by higher EBITA from the company’s Building Solutions North America segment.
Johnson Controls reported revenues of $5,343 million, down 17.2% year over year, in the fiscal third quarter. The revenue figure, however, beat the Zacks Consensus Estimate of $5,143 million. Gross profit decreased to $1,832 million from the year-earlier quarter’s $2,144 million.
Selling, general and administrative expenses in the fiscal third quarter totaled $1,334 million, lower than the prior-year quarter’s $1,388 million.
Segmental Results
Building Solutions North America: This segment’s adjusted revenues came in at $2,020 million, down from the year-ago quarter’s $2,327 million on decline in HVAC & Controls and Fire & Security. The segment’s EBITA increased to $311 million from the $310 million reported in third-quarter fiscal 2019 driven by cost-mitigation actions during the quarter.
Building Solutions Europe, Middle East, Africa/Latin America: Adjusted revenues in this segment came in at $756 million, down 18% year over year, due to fall in project installations, and volume declines across all regions and platforms. The segment’s EBITA was $62 million, down from the third-quarter fiscal 2019 level of $103 million. Significant volume declines during the quarter resulted in this downtrend.
Building Solutions Asia Pacific: Adjusted revenues decreased to $588 million from the year-ago quarter’s $691 million on declines in project installations and services. This segment’s EBITA came in at $92 million, down from the third-quarter fiscal 2019 level of $98 million, on lower volume.
Global Products: Adjusted revenues in this segment decreased to $1,979 million from the prior year’s $2,511 million, mainly due to lower sales within Building Management Systems, HVAC & Refrigeration Equipment and Specialty Products. This segment’s EBITA was $385 million, down from the third-quarter fiscal 2019 level of $481 million due to dismal volume.