Why Johnson Controls Shares Are Slipping Today

Johnson Controls International Plc JCI reported third-quarter FY23 sales growth of 7.8% year-on-year to $7.13 billion (+9% organically), missing the consensus of $7.19 billion.

Adjusted EPS of $1.03 was in line with the analyst consensus.

"Our third quarter results met the high end of our guidance as we delivered robust margin expansion and strong adjusted EPS growth," said Olivier Leonetti, chief financial officer. 

Gross profit rose 10.5% Y/Y to $2.43 billion. Adjusted EBIT was $981 million, and adjusted EBIT margin was 13.8%, improving 160 basis points versus the prior year.

Johnson Controls held $1.06 billion in cash and equivalents as of June 30, 2023. Inventories at the end of the quarter were $3.09 billion.

Outlook: Johnson sees FY23 adjusted EPS of $3.55 versus the street view of $3.58 (previously guided to $3.50-$3.60).

For FY23, the company sees adjusted segment EBITA margin improvement of +110 basis points, year-over-year (previously guided to 100-120 basis point improvement)

For Q4, the company sees adjusted EPS of $1.10, representing 11% growth year-over-year. The street view stands at $1.13. JCI sees organic revenue growth of +4% year-over-year in Q4.

Price Action: JCI shares traded lower by 6.1% at $65.75 on the last check Wednesday.