Johnson Controls lifts profit forecast on backlog surge
The building-technology supplier raised its full-year adjusted EPS guidance to $4.65 a share.
Johnson Controls International (JCI) reported second-quarter earnings that topped expectations and raised its full-year profit outlook, as a record backlog and expanding margins offset slowing order growth.
The quarter marked the fourth consecutive period of accelerating sales growth, even as organic order intake decelerated from the prior quarter’s torrid pace. Management cited strong demand for energy-efficient building systems and disciplined cost control across all three geographic segments.
Revenue rose 8% year-over-year to $6.1 billion, up from 7% growth in the January quarter. Adjusted earnings reached $1.19 a share, a 45% increase from the same period a year earlier and well above the $0.89 reported in the first quarter.
The Americas and EMEA segments each posted 7% sales growth, while the Asia-Pacific region led with a 16% jump. Adjusted EBITA margins widened across the board: the Americas segment expanded 100 basis points to 19.5%, EMEA surged 370 basis points to 14.9%, and APAC added 350 basis points to 19.8%. Corporate expenses fell 18% to $152 million, extending a trend of overhead reduction.
Backlog swelled to a record $20.0 billion, up 26% organically from the prior year, as the company began including equipment-only sales in its backlog calculation. Orders grew 30% organically, down from 39% in the first quarter but still well above pre-pandemic levels.
Free cash flow totaled $604 million, up from $531 million in the prior quarter. The company raised its full-year adjusted EPS guidance to a range of $4.60 to $4.70 a share, up from $4.40 to $4.50 previously, while maintaining its mid-single-digit organic sales growth target.
Johnson Controls also said it expects to complete the sale of its Residential and Light Commercial HVAC business, classified as held for sale since the fourth quarter, by the end of the fiscal year.
Source: company public filings.