Building Solutions Provider Johnson Controls' Q4 Results Fall Short Of Expectations: Details

Johnson Controls International Plc JCI reported fourth-quarter FY23 sales growth of 2.7% year-on-year to $6.91 billion (+2% organically), missing the consensus of $7.09 billion.

Segment sales: Building Solutions North America $2.8 billion (+8% Y/Y), Building Solutions EMEA/LA $1.05 billion (+7% Y/Y), Asia Pacific $697 million (-7% Y/Y) and Global Products $2.39 billion (-2% Y/Y).

Adjusted EPS of $1.05 (+6% Y/Y) below the consensus of $1.09.

Gross profit declined by 3.8% Y/Y to $2.21 billion, and margin contracted by 215 bps to 32%.

JCI’s backlog increased 9% organically YoY to $12.1 billion, and orders in Q4 increased 9% on an organic basis.

The adjusted EBIT for the quarter was $936 million, and the adjusted EBIT margin was 13.6%, flat compared to the prior year.

Related: Johnson Controls Likely To Report Higher Q4 Earnings; These Most Accurate Analysts Revise Forecasts Ahead Of Earnings Call

Operating cash flow from continuing operations totaled $1.39 billion, compared to $1.18 billion last year. Free cash flow from continuing operations stood at $1.27 billion.

Johnson Controls held $835 million in cash and equivalents as of September 30, 2023. At the end of the quarter, inventories were $2.78 billion (+4.2% Y/Y).

JCI repurchased 0.2 million shares for ~$12 million in Q4. During FY23, it repurchased 10.5 million shares for ~$625 million.

1Q24 Guidance: JCI expects Organic revenue ~flat YoY; adjusted segment EBITA margin of ~13%; and Adjusted EPS of ~$0.48-$0.50 versus $0.70 consensus.

FY24 Guidance: The company sees Organic revenue growth up ~mid-single-digit. Adjusted segment EBITA margin improvement of ~25+ basis points and Adjusted EPS of ~$3.65-$3.80 versus $3.96 consensus.

Price Action: JCI shares traded lower by 1.33% at $55.82 premarket on Tuesday.

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