Summary
Johnson Controls International plc (JCI) reported its fiscal year 2019 results, marked by the significant divestiture of its Power Solutions business for $13.2 billion in April 2019. This strategic move has reshaped the company's focus, allowing it to concentrate on its core building technologies and services. Despite a slight increase in net sales driven by organic growth, the company's profitability was impacted by higher selling, general, and administrative expenses, partly due to unfavorable mark-to-market adjustments. The company also continued its commitment to shareholder returns through substantial share repurchases, utilizing proceeds from the Power Solutions sale. Management highlights ongoing efforts in restructuring and efficiency improvements across its global operations to drive future growth and profitability. Operationally, Johnson Controls continues to lead in building automation, HVAC, security, and fire suppression systems. The company's backlog remained robust at $9.2 billion, with an additional $5.2 billion in remaining performance obligations indicating strong future revenue potential. Investors should note the company's significant goodwill balance and the ongoing management of environmental liabilities, including those related to PFAS contamination. The company's financial position remains solid, with a notable reduction in net debt following the Power Solutions divestiture, providing flexibility for future strategic initiatives and capital allocation.
Financial Highlights
53 data points| Revenue | $23.97B |
| Cost of Revenue | $16.27B |
| Gross Profit | $7.69B |
| R&D Expenses | $319.00M |
| SG&A Expenses | $6.24B |
| Operating Income | $1.10B |
| Interest Expense | $335.00M |
| Net Income | $5.67B |
| EPS (Basic) | $6.52 |
| EPS (Diluted) | $6.49 |
| Shares Outstanding (Basic) | 870.20M |
| Shares Outstanding (Diluted) | 874.30M |
Key Highlights
- 1Divestiture of Power Solutions business for $13.2 billion completed in April 2019, shifting focus to building technologies and services.
- 2Net sales increased by 2% year-over-year to $23.97 billion, driven by organic sales growth across segments.
- 3Selling, General, and Administrative (SG&A) expenses increased by 11% year-over-year, impacting profitability, partly due to mark-to-market adjustments.
- 4Significant share repurchases totaling $5.98 billion were made during fiscal year 2019.
- 5Backlog stood at $9.2 billion as of September 30, 2019, with $14.4 billion in remaining performance obligations.
- 6Net debt significantly decreased by 59% to $4.41 billion following the Power Solutions divestiture.
- 7The company continues to manage environmental liabilities, notably increasing reserves for PFAS contamination remediation.