Johnson Controls International plc Quarterly Report for Q1 Ended Dec 31, 2018

Summary

Johnson Controls International plc reported its financial results for the quarter ended December 31, 2018. The company saw a 3% increase in net sales to $5.46 billion, driven by organic sales growth across its segments, although this was partially offset by unfavorable foreign currency translation. Net income attributable to Johnson Controls increased significantly by 54% to $355 million, largely due to a substantial decrease in restructuring and impairment costs and a lower income tax provision, despite a reduction in income from discontinued operations. Operationally, the company is progressing with the planned divestiture of its Power Solutions business, which is now classified as a discontinued operation. This strategic move is a key focus for investors, as it aims to streamline the company's portfolio. While gross profit margin saw a slight decrease, selling, general, and administrative expenses increased, partly due to prior year gains on divestitures. The company maintained a strong liquidity position and remains compliant with its debt covenants.

Key Highlights

• 1Consolidated net sales increased by 3% to $5.46 billion, driven by organic sales growth across all segments.
• 2Net income attributable to Johnson Controls saw a significant increase of 54% to $355 million compared to the prior year quarter.
• 3Restructuring and impairment costs decreased substantially to $0 from $154 million in the prior year period, positively impacting net income.
• 4The Power Solutions business was classified as a discontinued operation, with the sale to BCP Acquisitions LLC for $13.2 billion expected to close by June 30, 2019.
• 5The company repurchased $467 million of its shares during the quarter, demonstrating a commitment to returning capital to shareholders.
• 6Total debt increased by 9% to $11.9 billion, leading to a slight increase in net debt as a percentage of total capitalization to 36.6%.

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