Summary
Johnson Controls International plc reported mixed results for the second quarter of fiscal year 2024. While net sales remained relatively flat year-over-year, the company experienced a significant net loss attributable to shareholders, primarily driven by a substantial $750 million charge related to the settlement of Aqueous Film-Forming Foam (AFFF) litigation. This charge, alongside a $230 million goodwill impairment, significantly impacted profitability, resulting in a diluted loss per share of $0.41 compared to earnings of $0.19 in the prior year. Despite the bottom-line pressure, the company saw positive trends in certain segments, with Building Solutions North America and EMEA/LA reporting increased net sales and segment EBITA. The company also highlighted ongoing efforts to drive growth through its OpenBlue platform and smart building solutions, capitalizing on increasing demand for sustainable and efficient buildings. However, persistent supply chain challenges and weakness in certain markets, particularly China, continue to pose headwinds.
Financial Highlights
52 data points| Revenue | $5.60B |
| Cost of Revenue | $3.67B |
| Gross Profit | $1.92B |
| SG&A Expenses | $2.06B |
| Operating Income | $19.00M |
| Net Income | -$277.00M |
| EPS (Basic) | $-0.41 |
| EPS (Diluted) | $-0.41 |
| Shares Outstanding (Basic) | 679.00M |
| Shares Outstanding (Diluted) | 679.00M |
Key Highlights
- 1Reported a net loss attributable to Johnson Controls of $277 million, or $0.41 per diluted share, for the three months ended March 31, 2024, a significant decline from a net income of $133 million, or $0.19 per diluted share, in the prior year's quarter.
- 2Recognized a $750 million charge related to a settlement agreement with a nationwide class of public water systems for PFAS claims stemming from AFFF use, which significantly impacted SG&A expenses and net income.
- 3Recorded a $230 million goodwill impairment charge in the Global Products segment, reflecting a quantitative goodwill impairment test triggered by lower-than-expected results.
- 4Building Solutions North America saw a 9% increase in net sales and an 18% increase in segment EBITA, driven by organic growth, price increases, and acquisition contributions.
- 5Building Solutions EMEA/LA reported a 3% increase in net sales and a 29% increase in segment EBITA, benefiting from productivity, higher-margin backlog conversion, and service growth.
- 6Total net sales for the quarter were $6.70 billion, relatively flat compared to $6.69 billion in the prior year, with growth in Services partially offset by declines in Products & Systems.
- 7The company ended the quarter with $843 million in cash and cash equivalents and maintained a share repurchase program with approximately $2.5 billion remaining authorization.