Johnson Controls Earnings: Profit Rises for Fourth Straight Quarter

S&P 500 (NYSE:SPY) component Johnson Controls Inc. (NYSE:JCI) reported its results for the third quarter. Johnson Controls is a technology and industrial company focused on building efficiency, automotive experience and power solutions.

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Johnson Controls Inc. Earnings Cheat Sheet

Results: Net income for Johnson Controls Inc. rose to $417 million (61 cents per share) vs. $357 million (52 cents per share) in the same quarter a year earlier. This marks a rise of 16.8% from the year-earlier quarter.

Revenue: Rose 2.1% to $10.58 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Johnson Controls Inc. fell short of the mean analyst estimate of 67 cents per share. It fell short of the average revenue estimate of $10.82 billion.

Quoting Management: “While we saw a significant improvement in profitability in the third quarter, sluggish demand in some of our key markets along with a much weaker Euro resulted in lower top line growth than we expected,” said Stephen A. Roell, Johnson Controls chairman and chief executive officer. “Despite challenging markets, Building Efficiency segment income improved by 28 percent over last year as the business continues to gain market share. General weak demand in the automotive aftermarket was a negative for battery shipments in the quarter. At the same time, the prices for the spent battery cores we use in recycling lead hit an all-time high in the quarter, negatively impacting profitability. We do not expect this unusual combination of soft demand and higher input costs to continue past the fourth fiscal quarter. Automotive Experience benefitted from the higher auto production levels in North America, but the downturn in Europe slowed progress in our efforts to reduce operational inefficiencies.”

Key Stats:

The company has now seen its net income rise for three quarters in a row. In the second quarter, net income rose 2.8% and in the first quarter, the figure rose 9.3%.

Revenue has increased for four quarters in a row. Revenue increased 4.2% to $10.56 billion in the second quarter. The figure rose 9.2% in the first quarter from the year earlier and climbed 19.3% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company fell short of estimates last quarter after being in line with expectations the quarter before with net income of 53 cents.

Looking Forward: Over the past sixty days, the outlook for the company’s performance next quarter has become increasingly unfavorable. The average estimate for the fourth quarter is 90 cents per share, a drop from 92 cents. At $2.70 per share, the average estimate for the fiscal year has fallen from $2.76 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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