Johnson Controls Inc. Earnings: Yet Another Quarter of Profitability

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

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Johnson Controls Earnings Cheat Sheet for the First Quarter.

Results: Net income for Johnson Controls Inc. rose to $410 million (60 cents per share) vs. $375 million (55 cents per share) in the same quarter a year earlier. This marks a rise of 9% from the year earlier quarter.

Revenue: Rose 10% to $10.42 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: JCI fell short of the mean analyst estimate of 62 cents per share. Analysts were expecting revenue of $10.52 billion.

Quoting Management: “Our first quarter results were in line with the expectations we announced at the beginning of the year. The automotive and buildings markets were stable in the quarter and we benefitted from our record backlogs in both businesses,” said Stephen A. Roell, Johnson Controls Chairman and Chief Executive Officer. “Automotive Experience revenues grew at a double-digit pace across all geographic regions and Building Efficiency commercial revenues and backlog were higher in a challenged global market. Power Solutions improved sales and income despite the soft demand for aftermarket batteries resulting from unseasonably warm winter temperatures globally.” Mr. Roell added, “Our growth in the first quarter is evidence of continued market share gains as we sustainably outperform our underlying industries. We took steps to improve our execution and added resources to improve quality and productivity. At the same time, we continued to invest in order to support our global growth and margin expansion opportunities.”

Key Stats:

Gross margin shrank 0.1 percentage point to 14.7%. The contraction appeared to be driven by increased costs, which rose 9.4% from the year earlier quarter while revenue rose 9.2%.

Revenue has risen the past four quarters. Revenue increased 19.3% to $10.79 billion in the fourth quarter of the last fiscal year. The figure rose 21.4% in the third quarter of the last fiscal year from the year earlier and climbed 22% in the second quarter of the last fiscal year from the year-ago quarter.

The company has now fallen short of estimates in the last two quarters. In the fourth quarter of the last fiscal year, it missed expectations by one cent with net income of 75 cents versus a mean estimate of net income of 76 cents per share.

Net income has increased 10.2% year over year on average across the last five quarters. The biggest gain came in the second quarter of the last fiscal year, when income climbed 29.2% from the year earlier quarter.

Looking Forward: Expectations for the company’s next quarter results are lower than they have been. Over the past sixty days, the average estimate for second quarter has fallen from 71 cents per share to 70 cents. For the fiscal year, the average estimate has moved down from $3.01 a share to $2.97 over the last ninety days.

Competitors to Watch: Lear Corporation (NYSE:LEA), Visteon Corporation (NYSE:VC), Gentex Corporation (NASDAQ:GNTX), Motorcar Parts of America, Inc. (NASDAQ:MPAA), United Technologies Corp. (NYSE:UTX), Honeywell Intl. Inc. (NYSE:HON), Commercial Vehicle Group, Inc. (NASDAQ:CVGI), Modine Manufacturing Co. (NYSE:MOD), Stoneridge, Inc. (NYSE:SRI), and Strattec Security Corp. (NASDAQ:STRT).

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

 

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com