On Thursday, Johnson Controls International plc (NYSE:$JCI) reported adjusted earnings of 71 cents per share in the fiscal third quarter, which ended on June 30, 2017. These results were in line with the Zacks Consensus Estimate. Further, earnings increased 16% from the 61 cents recorded in Q3 fiscal 2016.
Let’s break the report up into sections:
Operation Updates
For the 2017 fiscal third quarter, the Cork, Ireland-based company reported revenues of $7.67 billion, which is up 1% year-over-year. Similar to the adjusted earnings, revenues were almost in line with the Zacks Consensus Estimate.
Sales costs grew from $5.15 billion in the year-ago quarter to $7.68 billion. Meanwhile, gross profit increased to $2.4 billion from $1.4 billion in the 2016 quarter.
In terms of selling, general, and administrative expenses for the fiscal third quarter, this totaled $1.61 billion. This is an increase from the 2016 quarter of $895 million.
Division Results
- Building Efficiency Services: This division brought in revenue at $6.06 billion, which is almost unchanged from the 2016 level. Not including net M&A and foreign currency impact, organic sales grew 2%, primarily driven by an increase in field business product sales.
Year over year, quarter-end backlog increased 3%. Orders – which exclude M&A and adjusted for foreign exchange – were up 1% year over year, driven by growth in product orders.
Segment EBITA increased 7% year over year to $908 million.
- Power Solutions: Revenue for this division increased 6% and came in at $1.61 billion. Organic sales – excluding the impact of foreign exchange and higher lead pass-through costs – fell 2%. Segment EBITA was $304 million, which reflects an 8% increase from the 2016 quarter on favorable product mix, and productivity savings.
Financial Standing
As of June 30, 2017, Johnson Controls had cash and cash equivalents of $458 million. This clearly reflects a decline from $579 million as of September 30, 2016. In the fiscal third quarter, long-term debt increased to $11.8 billion from $11.1 billion as of September of last year.
During the fiscal third quarter, Johnson Controls repurchased 7.3 million shares for $307 million. As of right now, Johnson Control plans to complete $650-$750 million of share repurchases during fiscal 2017.
2017 Guidance
The company’s guided Q4 2017 adjusted earnings per share from continuing operations is in the range of 86 to 88 cents. This is a 13-16% increase year over year.
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