Summary
Johnson Controls International plc (JCI), formerly Tyco International plc, reported its third-quarter fiscal year 2016 results, highlighting a slight decline in net revenue but a significant increase in income from continuing operations attributable to shareholders, driven by a substantial gain related to the resolution of tax sharing agreement liabilities. The company is actively preparing for its merger with Johnson Controls, Inc., which is expected to close by October 2016. This strategic merger promises to create a larger, diversified entity with enhanced market presence. Financially, the company saw a 1.6% decrease in net revenue for the quarter, largely due to unfavorable foreign currency impacts and divestitures, although organic growth was positive at 1.5%. Despite the revenue dip, operating income saw an increase due to a significant gain from tax settlements and reduced restructuring charges, which offset merger-related costs and divestiture charges. The balance sheet reflects a decrease in cash and cash equivalents compared to the previous fiscal year, while debt levels have also been reduced through strategic repayments. The company maintains a strong focus on liquidity and flexibility to support its ongoing operations and strategic initiatives, including the pending merger.
Financial Highlights
54 data points| Revenue | $5.15B |
| Cost of Revenue | $3.73B |
| Gross Profit | $1.42B |
| SG&A Expenses | $895.00M |
| Operating Income | $236.00M |
| Interest Expense | $66.00M |
| Net Income | $383.00M |
| EPS (Basic) | $0.59 |
| EPS (Diluted) | $0.59 |
| Shares Outstanding (Basic) | 644.90M |
| Shares Outstanding (Diluted) | 649.70M |
Key Highlights
- 1Net revenue for the third quarter of fiscal 2016 decreased by 1.6% to $2.45 billion compared to the prior year period, primarily due to unfavorable foreign currency impacts and divestitures, though organic revenue growth was 1.5%.
- 2Income from continuing operations attributable to Tyco ordinary shareholders increased significantly to $241 million from $188 million in the prior year quarter, boosted by a $54 million gain from the resolution of tax sharing agreement liabilities.
- 3Operating income decreased by 6.7% to $236 million, impacted by higher divestiture charges, merger costs, and unfavorable foreign currency impacts, partially offset by lower restructuring and repositioning charges.
- 4The company is progressing towards its merger with Johnson Controls, Inc., with the transaction expected to close by October 2016, subject to customary closing conditions and shareholder approvals.
- 5Cash and cash equivalents decreased to $345 million from $1.40 billion in the prior fiscal year-end, reflecting operational needs and strategic outflows.
- 6Total debt decreased to $2.51 billion from $3.15 billion, driven by debt redemptions and repayments, improving the debt-to-capital ratio.
- 7Backlog of unfilled orders increased by 4.9% to $4.79 billion, indicating strong future revenue potential across segments.