Summary
Johnson Controls International plc (JCI) reported its financial results for the third quarter of fiscal year 2022, ending March 31, 2022. The company experienced a significant increase in net sales, driven by organic growth and acquisitions, though profit margins were compressed due to supply chain inefficiencies and cost pressures. Restructuring and impairment costs were notably higher compared to the prior year, largely impacting net income and comprehensive income attributable to Johnson Controls. The company also provided insights into ongoing macroeconomic challenges, including inflation and supply chain disruptions, which are expected to continue impacting results. While revenue showed a healthy increase, the substantial rise in restructuring and impairment costs, alongside increased selling, general, and administrative expenses, significantly reduced net income and diluted earnings per share compared to the prior year. The company continues to manage its capital structure, with a robust share repurchase program and dividend payments, while navigating a complex global economic environment characterized by persistent supply chain issues and inflationary pressures. Investors should monitor the company's ability to effectively manage these costs and supply chain challenges to improve profitability in future periods.
Financial Highlights
52 data points| Revenue | $6.10B |
| Cost of Revenue | $4.14B |
| Gross Profit | $1.96B |
| SG&A Expenses | $1.45B |
| Operating Income | $392.00M |
| Interest Expense | $56.00M |
| Net Income | $11.00M |
| EPS (Basic) | $0.02 |
| EPS (Diluted) | $0.02 |
| Shares Outstanding (Basic) | 699.10M |
| Shares Outstanding (Diluted) | 702.70M |
Key Highlights
- 1Net sales increased by 9% year-over-year for both the three and six months ended March 31, 2022, driven by organic sales growth and acquisitions.
- 2Gross profit saw a modest increase of 1% for the quarter and 5% year-to-date, but gross profit margin declined due to supply chain inefficiencies and price/cost pressures.
- 3Restructuring and impairment costs surged significantly, from $96 million in the prior year's quarter to $384 million in the current quarter, and from $96 million year-to-date to $433 million.
- 4Net income attributable to Johnson Controls decreased substantially by 97% for the quarter and 51% year-to-date, largely due to increased restructuring and impairment costs and higher SG&A expenses.
- 5Diluted earnings per share also saw a significant decline, to $0.02 for the quarter and $0.56 year-to-date, down from $0.48 and $1.10, respectively, in the prior year.
- 6The company continues to repurchase shares, with approximately $4 billion remaining under its authorization, and declared a dividend of $0.35 per common share.
- 7Persistent supply chain disruptions, inflation, and geopolitical factors (like the Russia-Ukraine conflict) are noted as ongoing challenges expected to impact results for the remainder of fiscal 2022.