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Johnson Controls (JCI) Q3 Earnings, Revenues Top Estimates

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Johnson Controls International plc (JCI - Free Report) has reported adjusted earnings per share of 65 cents in third-quarter fiscal 2019, surpassing the Zacks Consensus Estimate of 63 cents. Earnings were 81 cents per share in third-quarter fiscal 2018. The reported quarter witnessed solid organic revenue growth.

Operational Update

For the quarter under review, Johnson Controls reported revenues of $6.45 billion, up 3% year over year. Revenues surpassed the Zacks Consensus Estimate of $6.42 billion. In the quarter under review, its cost of sales increased to $4.31 billion from $4.19 billion in the year-ago quarter. Gross profit rose to $2.14 billion from $2.09 billion in the year-ago quarter.

Selling, general and administrative expenses in the fiscal third quarter totaled $1.39 billion, down from the prior-year quarter figure of $1.44 billion.

Segment Results

Building Solutions North America: This segment’s adjusted revenues were $2.33 billion, increasing from the year-ago quarter’s $2.25 billion. The segment’s EBITA decreased to $310 million from $318 million in third-quarter fiscal 2018.

Building Solutions Europe, Middle East, Africa/Latin America: Adjusted revenues in this segment declined to $922 million from $926 million a year ago. Segment’s EBITA was $103 million, up from third-quarter fiscal 2018 level of $98 million.

Building Solutions Asia Pacific: Adjusted revenues in this segment rose to $691 million from $681 million a year ago. This segment’s EBITA was $98 million, up from third-quarter fiscal 2018 level of $97 million.

Global Products: Adjusted revenues in this segment rose to $2.51 billion from $2.43 billion a year ago. This segment’s EBITA was $481 million, up from third-quarter fiscal 2018 level of $441 million.

Financial Position

Johnson Controls had cash and cash equivalents of $3.69 billion as of Jun 30, 2019, up from $185 million as of Sep 30, 2018. Long-term debt declined to $6.8 billion in the quarter under review from $9.62 billion as of Sep 30, 2018.

In the reported quarter, the company repurchased 105 million shares for $4.1 billion.

Guidance

The company anticipates fiscal 2019 adjusted EPS from continuing operations of $1.93-$1.95, suggesting a 21-23% increase from the year-ago reported figure.

Zacks Rank & Stocks to Consider

Johnson Controls currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the auto space are Copart, Inc. (CPRT - Free Report) , CarMax, Inc. (KMX - Free Report) and Gentex Corporation (GNTX - Free Report) . While Copart currently sports a Zacks Rank #1 (Strong Buy), CarMax and Gentex carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Copart has an expected long-term growth rate of 20%. In the past year, shares of the company have rallied 35.6%.

CarMax has an expected long-term growth rate of 12.6%. In the past year, shares of the company have moved up 17.6%.

Gentex has an expected long-term growth rate of 5%. In the past year, shares of the company have returned 17.1%.

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