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Johnson Controls (JCI) to Post Q2 Earnings: What to Expect

Zacks Equity Research
·4-min read

Johnson Controls JCI is scheduled to release second-quarter fiscal 2023 (ended Mar 31, 2023) earnings numbers on May 5, before market open.

The company has a decent earnings surprise history, having outperformed the Zacks Consensus Estimate in two of the preceding four quarters, while matching estimates in the other two.

Let’s see how things have shaped up for Johnson Controls in the fiscal second quarter.

Johnson Controls International plc Price and EPS Surprise

Johnson Controls International plc Price and EPS Surprise
Johnson Controls International plc Price and EPS Surprise

Johnson Controls International plc price-eps-surprise | Johnson Controls International plc Quote

Factors to Note

Pricing actions and cost-control measures are likely to have aided Johnson Controls’ fiscal second-quarter performance. The acquisition of Tempered Networks in June 2022, which has bolstered the company’s OpenBlue technology stack, is expected to have boosted its top line. The Zacks Consensus Estimate for fiscal second-quarter revenues indicates a 6.1% increase from the year-ago reported number. We expect JCI’s fiscal second-quarter revenues to increase 4.8% year over year.

The Building Solutions North America segment is expected to have recorded higher revenues on the back of continued improvement in HVAC & Controls and growth in the Install business. The Zacks Consensus Estimate for segmental revenues suggests a 10.1% jump from the year-ago reported number. We expect Building Solutions North America revenues to rise 7.8% year over year in the fiscal second quarter.

Growth in service-based and Fire & Security businesses is likely to have boosted revenues at the Building Solutions Europe, Middle East, Africa/Latin America segment. The consensus mark for segmental revenues hints at a 1.5% increase from the second quarter fiscal 2023 reported number. We expect the same to inch up 1.2% from the year-ago reported figure.

For the fiscal second quarter, Johnson Controls anticipates organic revenue growth of approximately 10% year over year. The company expects adjusted earnings of 72-74 cents per share, indicating a 15-18% rise year over year.

Despite the aforementioned positives, the Global Products segment might reflect some softness due to a slowdown in residential demand and supply-chain disruptions. Also, given Johnson Controls’ wise exposure to international markets, foreign-currency woes might have affected its top-line performance.

Earnings Whispers

Our proven model predicts an earnings beat for Johnson Controls this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below.
 
Earnings ESP: Johnson Controls has an Earnings ESP of +1.02% as the Most Accurate Estimate is pegged at 74 cents, higher than the Zacks Consensus Estimate of 73. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Johnson Controls currently carries a Zacks Rank #2.

Highlights of Q1 Earnings

Johnson Controls reported first-quarter fiscal 2023 adjusted earnings of 67 cents per share, which surpassed the Zacks Consensus Estimate of 66 cents. The bottom line increased 24.1% year over year. Total revenues of $6,068 million missed the Zacks Consensus Estimate of $6,263.8 million. The top line increased 3.5% year over year.

Other Stocks to Consider

Here are some other companies within the broader Industrial Products sector that you may want to consider, as according to our model, these have the right combination of elements to beat on earnings this reporting cycle.

Zebra Technologies ZBRA has an Earnings ESP of +3.06% and a Zacks Rank #2. The company is scheduled to release first-quarter 2023 results on May 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Zebra Technologies’ first-quarter earnings has been revised upward by 1% in the past 60 days. The stock has rallied around 21% in the past six months.

Illinois Tool Works ITW has an Earnings ESP of +1.05% and a Zacks Rank #3. The company is set to release first-quarter 2023 results on May 2.

While the Zacks Consensus Estimate for Illinois Tool’s first-quarter earnings has been revised downward by approximately 1% in the past 60 days, the same has increased by 2.3% in the past 90 days. The stock has gained 13.4% in the past six months.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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