Johnson Controls International plc JCI reported second-quarter fiscal 2025 (ended March 2025) adjusted earnings of 82 cents per share, which beat the Zacks Consensus Estimate of 79 cents. The bottom line increased 19% year over year.

Total revenues (continuing operations) of $5.68 billion surpassed the consensus estimate of $5.64 billion. The top line increased 1.4% year over year, whereas organic revenues increased 7%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Johnson Controls International Price, Consensus and EPS SurpriseJohnson Controls International plc Price, Consensus and EPS Surprise

Johnson Controls International price-consensus-eps-surprise-chart | Johnson Controls International Quote

Q2 Segmental Results

Building Solutions North America: Revenues were $2.92 billion, up 6% year over year. Our estimate was $2.70 billion. Organic sales also increased 7%, driven by the strong performance of the applied heating, ventilation and air conditioning (HVAC) and controls businesses.  Adjusted EBITA increased 5% year over year to $390 million.

Building Solutions Europe, Middle East, Africa/Latin America: Revenues totaled $1.09 billion, up 2% year over year. Our estimate was $1.07 billion. Organic sales climbed 5% due to growth in the service and fire and security businesses. Adjusted EBITA was $136 million, up 53% year over year.

Building Solutions Asia Pacific: Revenues increased 10% to $542 million. Our estimate was $531.5 million. Sales grew 13% organically, driven by growth in the service and systems businesses. Adjusted EBITA was $79 million, up 46% year over year.

Global Products: The segment reported revenues of $1.13 billion, down 13% year over year. Our estimate was $1.34 billion. Organic sales were up 8%, supported by strength in the Applied HVAC business and positive price and volume growth. Adjusted EBITA was $343 million, up 9% year over year.

JCI’s Margin Profile

In the fiscal second quarter, Johnson Controls’ cost of sales decreased 1.9% year over year to approximately $3.6 billion. Gross profit increased 7.5% year over year to $2.1 billion and the margin rose 220 basis points (bps) to 36.5%. Selling, general and administrative expenses were $1.4 billion, down 30.9% year over year.

Financial Position

Johnson Controls had cash and cash equivalents of $795 million as of March 31, 2025, compared with $606 million at the end of fiscal 2024 (ended Sept. 30, 2024). Long-term debt was $8.2 billion compared with $8 billion at the end of fiscal 2024.

In the first six months of fiscal 2025, the company generated net cash of $799 million from operating activities against $437 million used in the year-ago period. It reported a free cash flow of $589 million in the same period against a free cash outflow of $647 million in the year-ago period.

The company repurchased 8.2 million shares for approximately $660 million in the first six months of fiscal 2025.

Story Continues

JCI’s Q3 Guidance

Johnson Controls anticipates mid-single-digit organic revenue growth from the year-ago level. Adjusted segment EBITA margin is estimated to be approximately 17.5%. JCI expects adjusted earnings to be in the range of $0.97-$1.00 per share.

FY25 Guidance

Johnson Controls anticipates organic revenue growth to be in the mid-single-digit range from the prior-year level. Adjusted segment EBITA margin is expected to improve 90 bps from the year-ago actual. JCI expects adjusted earnings to be about $3.60 per share. It expects adjusted free cash flow conversion of approximately 100%.

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold). Some better-ranked companies are discussed below:

Insteel Industries IIIN currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

IIIN delivered a trailing four-quarter average earnings surprise of 122.4%. In the past 60 days, the Zacks Consensus Estimate for Insteel Industries’ fiscal 2025 earnings has increased 34.8%.

Unifirst Corporation UNF currently carries a Zacks Rank #2 (Buy). UNF delivered a trailing four-quarter average earnings surprise of 12.3%. In the past 60 days, the consensus estimate for Unifirst’s fiscal 2025 (ending August 2025) earnings has increased 4.1%.

AptarGroup, Inc. ATR presently carries a Zacks Rank of 2. ATR delivered a trailing four-quarter average earnings surprise of 7.3%. In the past 60 days, the consensus estimate for AptarGroup’s 2025 earnings has increased 2.5%.

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