JCI Beats Q3 Revenue Estimates as Organic Sales Increase 6%

Johnson Controls reported adjusted earnings per share of 81 cents in the third quarter, beating the Zacks Consensus Estimate of 80 cents.

CORK, Ireland — Johnson Controls (NYSE: JCI) reported third quarter earnings of 81 cents per share, which bested the Zacks Consensus Estimate of 80 cents per share. During the same period the prior year, the company posted earnings of 71 cents per share.

Sales of $8.1 billion increased 6% compared to the prior year, surpassing the Zacks Consensus Estimate by 2.01%. This compares to year-ago revenues of $7.68 billion. Excluding the impacts of M&A, foreign currency and lead prices, total sales also grew 6% organically, which JCI Chairman and CEO George Oliver attributes to solid growth in both the Buildings and Power Solutions units.

“More disciplined operating fundamentals and processes are driving improved performance against all of our key initiatives, including service, pricing, orders, underlying margins and free cash flow,” Oliver states in an announcement.

In North America, the Building Solutions division posted Q3 sales of $2.2 billion, an increase of 5% compared to the prior year quarter. Excluding M&A and foreign currency, organic sales also increased 5% versus the prior year, driven primarily by strong growth in Fire & Security and HVAC & Controls.

In the fiscal quarter announcement, Oliver states the company has made “significant progress” in its strategic review of the Power Solutions unit, which the company expects to conclude by the release of its fourth quarter earnings.

In March, JCI said it was “exploring strategic alternatives” for its Power Solutions business, a global leader in providing battery solutions to the automotive sector that includes a high-margin aftermarket model.

Divesting the Power Solutions unit reflects a strategic priority by JCI to strengthen and invest in its global market-leading positions in HVAC, fire and security solutions and integrated Building Management Systems, the company stated in March.

Bloomberg previously reported that JCI had invited potential suitors to a meeting to gauge interest in purchasing the Power Solutions business, which could sell for an estimated $12 billion.

The four finalists to purchase the business are reportedly Apollo Global Management, Clayton Dubilier & Rice, Brookfield Asset Management, and a consortium of Onex Corp. and the Canada Pension Plan Investment Board, according to Bloomberg.

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About the Author


Although Bosch’s name is quite familiar to those in the security industry, his previous experience has been in daily newspaper journalism. Prior to joining SECURITY SALES & INTEGRATION in 2006, he spent 15 years with the Los Angeles Times, where he performed a wide assortment of editorial responsibilities, including feature and metro department assignments as well as content producing for latimes.com. Bosch is a graduate of California State University, Fresno with a degree in Mass Communication & Journalism. In 2007, he successfully completed the National Burglar and Fire Alarm Association’s National Training School coursework to become a Certified Level I Alarm Technician.

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