Summary
Johnson Controls International plc (JCI) reported its financial results for the fiscal second quarter ending March 31, 2018. The company demonstrated solid revenue growth, driven by favorable foreign currency translation and increased sales in both its Building Technologies & Solutions and Power Solutions segments. While the overall gross profit margin saw a slight decrease compared to the prior year, this was influenced by various factors including purchase accounting adjustments and higher operating costs in the Power Solutions segment. SG&A expenses were effectively managed, showing a notable decrease due to productivity savings and cost synergies. The company's net income attributable to Johnson Controls significantly improved year-over-year, largely benefiting from a lower income tax provision which was influenced by prior year discrete tax charges and ongoing tax planning initiatives. This improved profitability is reflected in the substantial increase in diluted earnings per share. JCI also provided an update on its ongoing restructuring efforts, which are expected to yield further cost savings in the coming years. The company maintained a strong liquidity position, with sufficient resources to meet its obligations.
Financial Highlights
53 data points| Revenue | $5.63B |
| Cost of Revenue | $3.81B |
| Gross Profit | $1.82B |
| SG&A Expenses | $1.49B |
| Operating Income | $109.00M |
| Interest Expense | $99.00M |
| Net Income | $438.00M |
| EPS (Basic) | $0.47 |
| EPS (Diluted) | $0.47 |
| Shares Outstanding (Basic) | 926.20M |
| Shares Outstanding (Diluted) | 932.50M |
Key Highlights
- 1Consolidated net sales increased by 3% to $7.475 billion for the three months ended March 31, 2018, compared to $7.267 billion in the prior year period, driven by favorable foreign currency translation and growth in both Building Technologies & Solutions and Power Solutions segments.
- 2Net income attributable to Johnson Controls surged to $438 million ($0.47 per diluted share) for the three months ended March 31, 2018, a significant improvement from a net loss of $148 million ($0.16 per diluted share) in the prior year period.
- 3Selling, General, and Administrative (SG&A) expenses decreased by 8% to $1.588 billion for the quarter, attributed to productivity savings, cost synergies, and a prior year impact of pension mark-to-market adjustments.
- 4The effective tax rate for the three months ended March 31, 2018, was 14%, an improvement from 129% in the prior year, benefiting from tax planning initiatives and a discrete non-cash tax benefit related to U.S. Tax Reform.
- 5The company reported $158 million in restructuring and impairment costs for the six months ended March 31, 2018, as part of ongoing initiatives to align resources with growth strategies and reduce its cost structure.
- 6Cash provided by operating activities for the six months ended March 31, 2018, was $533 million, a substantial increase from the $1,519 million used in the prior year period, primarily due to lower prior year income tax payments and operating cash outflows related to the Adient spin-off.
- 7Total debt decreased by 11% to $12.098 billion, and net debt as a percentage of total capitalization stood at 36.2% at March 31, 2018, indicating a strengthening balance sheet.