News

Johnson Controls International plc JCI is scheduled to release second-quarter fiscal 2024 (ended Mar 2024) financial numbers on May 01, before market open.

The company’s earnings surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing in one. The average earnings surprise was 0.3%. In the last reported quarter, its earnings of 51 cents per share beat the consensus estimate of 50 cents by 2%.

The consensus estimate for the company’s second-quarter fiscal 2024 revenues is pegged at $6.8 billion, suggesting an increase of 1% from the year-ago quarter’s reported figure. The consensus estimate for the company’s adjusted earnings is pinned at 75 cents per share, in line with the year-ago quarter’s reported number.

Key Factors and Estimates for Q2

The Building Solutions North America segment is expected to have benefited on the back of solid momentum in the applied heating, ventilation and air conditioning (HVAC) & controls businesses. We expect the segment’s revenues to be $2.6 billion, implying an increase of 2.4% from the year-ago reported figure.

The Building Solutions Europe, the Middle East, Africa/Latin America segment is expected to have benefited from continued momentum in applied HVAC & controls, fire & security and service businesses. Our estimate for the segment’s revenues is pegged at $1 billion, suggesting a 0.2% increase from the year-ago reported figure.

Investments in digital offerings, like the OpenBlue digital platform, which plays an integral part in meeting customer needs, are expected to have driven the company’s revenues in the fiscal second quarter.

However, Johnson Controls is expected to have put up a weak show in the upcoming earnings result due to weakness across its Global Products and Building Solutions Asia Pacific segments. Declining global residential sales are expected to have hurt the Global Products segment. Also, challenging end-market conditions in China are likely to have marred the performance of the Building Solutions Asia Pacific segment’s Install business in the to-be-reported quarter.

The escalating cost of sales poses a threat to Johnson Controls’ bottom line. High commodity prices are expected to have pushed up the cost of sales, which is likely to have been reflected in its margins in the fiscal second quarter. We expect the company’s cost of sales to escalate 2.5% year over year in the to-be-reported quarter.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for JCI this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as elaborated below.

Earnings ESP: Johnson Controls has an Earnings ESP of -0.74% as the Most Accurate Estimate is pegged at 75 cents per share, which is lower than the Zacks Consensus Estimate of 76 cents. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: Johnson Controls presently carries a Zacks Rank #4 (Sell).

Stocks to Consider

Here are some companies within the broader Industrial Products sector, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.

Atmus Filtration Technologies Inc. ATMU has an Earnings ESP of +0.57% and a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is slated to release first-quarter results on May 3. ATMU delivered a trailing four-quarter earnings surprise of 20.3%, on average.

Chart Industries, Inc. GTLS has an Earnings ESP of +9.86% and a Zacks Rank of 2. The company is slated to release first-quarter 2024 results on May 3.

Chart Industries’ earnings have surpassed the Zacks Consensus Estimate in three of the trailing four quarters while missing the mark in one, the average beat being 75.9%.

Axon Enterprise, Inc. AXON has an Earnings ESP of +5.97% and a Zacks Rank of 3, at present.

The company is scheduled to release first-quarter 2024 results on May 6. Axon’s earnings have surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 58.7%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.