A month has gone by since the last earnings report for Johnson Controls (JCI Quick QuoteJCI - Free Report) . Shares have added about 1.4% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important drivers.

Johnson Controls' Q4 Earnings Surpass Estimates, Revenues Miss

Johnson Controls reported fourth-quarter fiscal 2024 (ended September 2024) adjusted earnings of $1.28 per share, which beat the Zacks Consensus Estimate of $1.25. The bottom line increased 21.9% year over year.

Total revenues (continuing operations) of $6.25 billion missed the consensus estimate of $7.26 billion. The top line increased 6.7% year over year, while organic revenues increased 10%.

For fiscal 2024, the company’s adjusted earnings were $3.71 per share, up 6% year over year. Total revenues of $23 billion reflected an increase of 2.8% year over year.

Q4 Segmental Results

Building Solutions North America: Revenues were $3.2 billion, up 16% year over year. Organic sales jumped 16%, driven by the strong performance of applied heating, ventilation and air conditioning (HVAC) and controls businesses.  Adjusted EBITA increased 13% year over year to $484 million.

Building Solutions Europe, Middle East, Africa/Latin America: Revenues totaled $1.1 billion, up 7% year over year. Organic sales climbed 10% due to growth in controls, security and industrial refrigeration businesses. Adjusted EBITA was $128 million, up 56% year over year.

Building Solutions Asia Pacific: Revenues decreased 5% to $664 million. Sales declined 5% organically due to weakness in the systems business in China. Adjusted EBITA was $94 million, flat year over year.

Global Products: The segment reported revenues of $2.4 billion, flat year over year. Organic sales were up 8% due to an increase in the commercial and residential HVAC businesses. Adjusted EBITA was $670 million, up 33% year over year.

JCI’s Margin Profile

In the fiscal fourth quarter, Johnson Controls’ cost of sales increased 2.6% year over year to approximately $4 billion. Gross profit increased 15% year over year to $2.3 billion and the margin increased 260 basis points (bps) to 36.3%. Selling, general and administrative expenses were $1.4 billion, up 4.5% year over year.

Financial Position

Johnson Controls had cash and cash equivalents of $606 million as of Sept. 30, 2024, compared with $828 million at the end of fiscal 2023. Long-term debt was $8 billion compared with $7.82 billion at the end of fiscal 2023.

In fiscal 2024, the company generated net cash of $1.57 billion from operating activities compared with $1.86 billion in the year-ago period. It reported a free cash flow of $1.57 billion in the fiscal year compared with $1.68 billion in the year-ago period.

The company repurchased 5.4 million shares for approximately $370 million in the fiscal fourth quarter.

Q1 Fiscal 2025 Guidance

Johnson Controls anticipates mid-single digit organic revenue growth from the year-ago level. Adjusted segment EBITA margin is estimated to be approximately 14.5%. JCI expects adjusted earnings to be in the range of 57-60 cents per share.

Fiscal 2025 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 more than 50 bps from the year-ago actual. JCI expects adjusted earnings to be in the range of $3.40-$3.50 per share.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

The consensus estimate has shifted 16.39% due to these changes.

VGM Scores

At this time, Johnson Controls has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Johnson Controls has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Johnson Controls is part of the Zacks Building Products - Wood industry. Over the past month, Boise Cascade (BCC Quick QuoteBCC - Free Report) , a stock from the same industry, has gained 2.6%. The company reported its results for the quarter ended September 2024 more than a month ago.

Boise Cascade reported revenues of $1.71 billion in the last reported quarter, representing a year-over-year change of -6.6%. EPS of $2.33 for the same period compares with $3.58 a year ago.

Boise Cascade is expected to post earnings of $1.80 per share for the current quarter, representing a year-over-year change of -26.2%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.5%.

Boise Cascade has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.