Summary
Johnson Controls International plc's (JCI) 2018 10-K filing reveals a company undergoing significant strategic shifts, most notably the impending sale of its Power Solutions business for $13.2 billion. This move signifies a strategic pivot towards its core Building Technologies & Solutions (Buildings) segment, which accounted for 75% of net sales in fiscal year 2018. The Buildings segment demonstrated steady growth, with net sales increasing by 2% to $23.4 billion, driven by higher volumes and favorable foreign currency translation, though gross profit as a percentage of sales saw a slight decrease due to higher operating costs. Financially, JCI reported a 34% increase in net income attributable to shareholders, reaching $2.16 billion in FY2018, driven by improved operational performance, lower tax provisions, and reduced financing charges. The company also continued its share repurchase program, highlighting a commitment to returning value to shareholders. While the company navigates the sale of its automotive battery division, it remains focused on innovation and growth within its intelligent building solutions, aiming to capitalize on trends in smart cities and energy efficiency.
Financial Highlights
53 data points| Revenue | $23.40B |
| Cost of Revenue | $15.73B |
| Gross Profit | $7.67B |
| R&D Expenses | $310.00M |
| SG&A Expenses | $5.64B |
| Operating Income | $1.18B |
| Interest Expense | $409.00M |
| Net Income | $2.16B |
| EPS (Basic) | $2.34 |
| EPS (Diluted) | $2.32 |
| Shares Outstanding (Basic) | 925.70M |
| Shares Outstanding (Diluted) | 931.70M |
Key Highlights
- 1Johnson Controls International plc (JCI) announced the sale of its Power Solutions business for $13.2 billion, expected to close by June 30, 2019, with net proceeds of $11.4 billion.
- 2The Building Technologies & Solutions (Buildings) segment generated 75% of the company's consolidated net sales in FY2018, with total segment sales of $23.4 billion, up 2% from the prior year.
- 3Net income attributable to Johnson Controls increased by 34% to $2.16 billion in FY2018, compared to $1.61 billion in FY2017.
- 4Diluted earnings per share (EPS) increased to $2.32 in FY2018 from $1.71 in FY2017.
- 5The company repurchased approximately $300 million of its shares during FY2018 and had approximately $1.0 billion remaining under its share repurchase program as of September 30, 2018.
- 6Effective tax rate decreased significantly to 18% in FY2018 from 28% in FY2017, largely due to U.S. Tax Reform impacts.
- 7Restructuring and impairment costs decreased by 28% in FY2018 to $263 million, reflecting ongoing efforts to align resources with growth strategies.