Summary
Johnson Controls International plc reported a mixed financial performance for the quarter and nine months ended June 30, 2024. While net sales saw a slight increase year-over-year, driven by organic growth and services, profitability was impacted by various factors including unfavorable mix and ongoing cost pressures. The company is actively engaged in portfolio simplification, agreeing to sell its Air Distribution Technologies business and the Residential and Light Commercial HVAC business, signaling a strategic shift towards becoming a pure-play provider for commercial buildings. Despite a reported net income attributable to Johnson Controls of $975 million for the quarter, down from $1,049 million in the prior year, the company continues to generate operating cash flow, though it saw a decrease year-over-year largely due to working capital changes and the discontinuation of factoring programs. Significant developments include a substantial AFFF settlement provision and related insurance recoveries, which impacted SG&A expenses and cash flows. The company also recorded a goodwill impairment charge and is progressing with its restructuring plans. Looking ahead, JCI expects continued softness in China and is focused on capitalizing on the growing demand for smart, sustainable building solutions.
Financial Highlights
52 data points| Revenue | $5.90B |
| Cost of Revenue | $3.79B |
| Gross Profit | $2.11B |
| SG&A Expenses | $895.00M |
| Operating Income | $871.00M |
| Net Income | $975.00M |
| EPS (Basic) | $1.45 |
| EPS (Diluted) | $1.45 |
| Shares Outstanding (Basic) | 670.30M |
| Shares Outstanding (Diluted) | 672.80M |
Key Highlights
- 1Net sales increased 1% to $7.23 billion for the third quarter of fiscal 2024 and 1% to $20.02 billion for the first nine months, driven by organic growth and services, partially offset by unfavorable foreign currency translation.
- 2Net income attributable to Johnson Controls decreased to $975 million for the third quarter from $1,049 million in the prior year, with diluted EPS at $1.45 compared to $1.53.
- 3The company recorded a $750 million AFFF settlement provision, with $250 million paid and an expected insurance recovery of $351 million recognized in SG&A for the quarter.
- 4A goodwill impairment charge of $230 million was recognized in the current period related to one reporting unit.
- 5Johnson Controls is strategically divesting its Air Distribution Technologies business and has agreed to sell its Residential and Light Commercial HVAC business to Bosch for approximately $8.1 billion.
- 6Operating cash flow decreased to $572 million for the nine months ended June 30, 2024, from $831 million in the prior year, impacted by working capital changes and the discontinuation of factoring programs.
- 7The company's backlog for Building Solutions segments increased by 10% year-over-year to $12.9 billion as of June 30, 2024, indicating robust demand in key areas.