Core Insights - U.S. stocks experienced an upward trend, with the Nasdaq Composite increasing by over 200 points on Wednesday [1] - Johnson Controls International PLC reported fourth-quarter results that exceeded analyst expectations for both earnings and revenue, leading to a significant rise in its stock price [1] Company Performance - Johnson Controls reported adjusted earnings per share of $1.26, surpassing the analyst consensus estimate of $1.20 [1] - The company's quarterly revenue reached $6.44 billion, exceeding the forecast of $6.32 billion [1] - Johnson Controls shares rose by 8% to $119.88 following the earnings report [2] Other Notable Stock Movements - Solid Power Inc saw a 55.7% increase in shares to $8.74 after reporting better-than-expected quarterly EPS results [4] - Babcock & Wilcox Enterprises Inc shares surged by 38.8% to $5.19 due to better-than-expected third-quarter EPS results [4] - Neuropace Inc's shares jumped 38.3% to $13.00 after raising its FY25 sales guidance above estimates [4] - Rigel Pharmaceuticals Inc experienced a 33.8% increase to $37.97 after reporting strong quarterly results and raising FY25 sales guidance [4] - Digital Turbine Inc gained 31.2% to $7.76 after better-than-expected second-quarter results and an increase in FY26 sales guidance [4] - Kennedy-Wilson Holdings Inc rose 31% to $9.79 following a proposal for acquisition at $10.25 per share [4] - Lemonade Inc's shares increased by 30.8% to $76.73 after reporting strong quarterly results and raising FY2025 sales guidance [4] - Teradata Corp gained 25.3% to $26.00 after better-than-expected third-quarter results and an increase in FY25 EPS guidance [4] - Lumentum Holdings Inc's shares rose 23.5% to $232.60 after reporting strong first-quarter results and issuing positive second-quarter guidance [4] - Teva Pharmaceutical Industries Ltd gained 21.5% to $24.85 after beating third-quarter earnings and revenue estimates [4] - Veracyte Inc rose 21.1% to $43.74 after better-than-expected third-quarter results and an increase in FY25 sales guidance [4] - Qualys Inc gained 20.5% to $146.05 after reporting strong quarterly results and raising FY25 guidance [4] - DigitalOcean Holdings Inc's shares increased by 18.6% to $45.99 after better-than-expected third-quarter results and an increase in FY25 sales guidance [4] - Rivian Automotive Inc gained 16.4% to $14.56 after reporting better-than-expected quarterly sales results [4] - Zeta Global Holdings Corp rose 14% to $19.04 after better-than-expected third-quarter results and issuing FY26 sales guidance [4] - Quantumscape Corp gained 13% to $17.47 [4] - Fubotv Inc rose 12.5% to $4.12 [4] - Diebold Nixdorf Inc gained 11.1% to $62.50 following positive earnings [4] - Fluence Energy Inc rose 11% to $21.28 [4] - Seagate Technology Holdings PLC gained 10.8% to $277.59 after announcing exchanges with holders of $500 million principal amount of exchangeable notes [4] - Toast Inc gained 9.3% to $39.00 after reporting better-than-expected quarterly results and receiving an upgraded price target from Morgan Stanley [4] - Marvell Technology Inc gained 6.5% to $93.29 [4]

Let's get to Jim and stop trading. >> You know, Carl, you mentioned Johnson Controls and I doing some work on it. That is the leading coolant.They they make coolers like Vertive in the data center and they they make the air conditioners basically to keep it cool. And boy, it was the best number they've had since 2019. It's incredible.And it's it's a testament to what David was saying. Every time you get away from the data center, you get something like a mundane prosaic company like Johnson Controls that sh ...

Company Insights - Johnson Controls reported its best performance since 2019, highlighting its strong position in the coolant and air conditioning market, particularly for data centers [1] - The positive results from Johnson Controls are indicative of broader trends in the industry, as companies like Eaton also showed strong performance despite initial market skepticism [2] - The ongoing data center buildout is seen as a significant growth opportunity, with Johnson Controls positioned as a major beneficiary [3] Industry Trends - The data center sector is recognized as one of the most significant construction projects of the current era, driving demand for related services and products [3] - Companies that may appear mundane, like Johnson Controls, can deliver exceptional results, suggesting that there are hidden opportunities within traditional sectors [2]

Core Insights - Johnson Controls International plc reported strong fourth-quarter results, with adjusted earnings per share of $1.26, surpassing the analyst consensus estimate of $1.20 [1] - The company achieved quarterly revenue of $6.44 billion, exceeding the forecast of $6.32 billion [1] Quarterly Metrics - Orders increased by 7% year-over-year, driven by strong demand in the Americas, which offset weakness in China [2] - Fourth-quarter sales rose by 3%, with organic sales up by 4%; for the entire year, sales increased by 3% and organic sales climbed by 6% [2] Financial Performance - Johnson Controls experienced double-digit EPS growth and reported a record backlog of $15 billion, reflecting a 13% increase [3] - Adjusted gross profit for the quarter rose by 4% to $2.365 billion, with adjusted gross margin expanding to 36.7% from 36.3% year-over-year [3] Sales Across Geographies - In the Americas, quarterly sales reached $4.325 billion, a 1% year-over-year increase, with organic sales up by 3% [4] - EMEA sales for the quarter were $1.3 billion, marking a 13% increase compared to the previous year [4] - APAC sales declined by 3% year-over-year to $780 million, primarily due to lower volumes in China [5] Outlook - The company anticipates first-quarter adjusted EPS of 83 cents, slightly above the analyst estimate of 82 cents [6] - For fiscal 2026, Johnson Controls projects adjusted EPS of $4.55, significantly higher than the $3.74 analyst estimate, driven by increasing needs in data center cooling and decarbonization [6] - Johnson Controls shares rose by 8.95% to $120.95 following the earnings report [6]

Financial Data and Key Metrics Changes - Fiscal 2025 saw a 6% increase in sales, with segment margins expanding by 100 basis points and adjusted EPS rising by 17% [8][24] - Free cash flow conversion reached 102%, reflecting disciplined execution and financial strength [8][24] - The company ended the quarter with approximately $400 million in available cash and net debt declined to 2.4 times compared to the prior year [24] Business Line Data and Key Metrics Changes - Organic revenue grew 4% in Q4, with segment margin expanding by 20 basis points to 18.8% [23] - Orders grew 6% in the quarter, with a notable 9% growth in the Americas, driven by data center strength [24] - EMEA orders increased by 3%, while APAC saw a small decline of 1% due to lower systems volumes [24] Market Data and Key Metrics Changes - The backlog expanded by 13% to a record $15 billion, with system backlog growing by 14% and service backlog by 9% [24] - In the Americas, sales were up 3% organically, while EMEA delivered 9% organic growth [25] - APAC sales declined 3% organically, primarily due to lower volumes in China [25] Company Strategy and Development Direction - The company is updating its long-term growth algorithm to reflect improved mid-single-digit top-line growth and double-digit adjusted EPS growth [8][27] - A proprietary business system is being implemented to enhance operational efficiency and customer-centricity [9][10] - The focus on technology innovation and sustainability is expected to drive future growth, particularly in advanced thermal management for data centers [15][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate evolving market conditions and achieve long-term growth commitments [30] - The guidance for fiscal 2026 includes expectations for mid-single-digit organic revenue growth and approximately 100% free cash flow conversion [29][30] - The company is focused on leveraging strengths in HVAC controls and digital solutions to capture significant opportunities [21][27] Other Important Information - The company is pursuing selective acquisitions to strengthen its portfolio while maintaining a strong balance sheet [28] - Recent leadership changes aim to enhance operational capabilities and align talent with strategic priorities [11] Q&A Session Summary Question: Can you walk through the 50% operating leverage target for 2026? - Management indicated that EMEA and APAC will be the main drivers of margin improvement, with overall operating leverage expected to be in the 50s or above [33] Question: What are the opportunities for cost and portfolio improvements? - Management highlighted ongoing efforts to reduce G&A costs and improve productivity through the proprietary business system, with a vibrant acquisition pipeline [34][38] Question: Can you provide details on the $250 million benefits related to operating leverage? - Management confirmed that the operating leverage is expected to improve over time, driven by productivity and responsible cost reductions [40][41] Question: What is the outlook for orders in the first quarter? - Management noted that the health of the pipeline continues to improve, with opportunities for growth in orders despite tough comparisons [51] Question: How does the company view the content opportunity in data centers? - Management emphasized that the demand for cooling solutions is increasing due to higher power requirements from newer chips, positioning the company well in the market [66] Question: Can you elaborate on the investments in technology for the aftermarket? - Management stated that technology investments are aimed at both gaining market share and improving margin profiles by lowering service costs [69]

Financial Data and Key Metrics Changes - Fiscal 2025 saw a 6% increase in sales, with segment margins expanding by 100 basis points and adjusted EPS rising by 17% [8][24] - Free cash flow conversion reached 102%, reflecting disciplined execution and financial strength [8][24] - The company ended the quarter with approximately $400 million in available cash and net debt declined to 2.4 times compared to the prior year [24] Business Line Data and Key Metrics Changes - Organic revenue grew 4% in Q4, with segment margin expanding 20 basis points to 18.8% [23] - Orders grew 6% in the quarter, with 9% growth in the Americas, supported by strength in data centers [24] - EMEA orders increased 3%, while APAC orders saw a small decline of 1% [24] Market Data and Key Metrics Changes - In the Americas, sales were up 3% organically, while EMEA delivered 9% organic growth [25] - APAC sales declined 3% organically, primarily due to lower volumes in China [25] - The backlog grew 13% to a record $15 billion, with system backlog growing 14% and service backlog growing 9% [26] Company Strategy and Development Direction - The company is updating its long-term growth algorithm to reflect improved mid-single-digit top-line growth and double-digit adjusted EPS growth [8][27] - The proprietary business system is being developed as a growth engine, focusing on customer-centric and continuous improvement [7][9] - The company aims to leverage strengths in HVAC controls and digital solutions to capture significant opportunities in decarbonization and mission-critical systems [21][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate evolving market conditions and maintain strong operational discipline [30] - The guidance for fiscal 2026 includes expectations for mid-single-digit organic revenue growth and approximately 100% free cash flow conversion [29][30] - Management highlighted the importance of technological innovation and sustainability in driving future growth [15][21] Other Important Information - The company is focused on strengthening leadership capabilities and aligning talent with strategic priorities [10] - Recent initiatives include a major announcement to provide green heat to Zurich through a waste incineration project, showcasing leadership in decarbonization [18][19] Q&A Session Summary Question: Can you walk through the 50% operating leverage target for 2026? - Management indicated that EMEA and APAC will be the main drivers of margin improvement, with overall operating leverage expected to be in the 50s or above [33] Question: Can you rank the opportunities going forward, including cost and portfolio opportunities? - Management emphasized ongoing efforts to reduce G&A costs and improve productivity, with a vibrant acquisition pipeline being pursued [34][38] Question: What are the drivers behind the decline in amortization? - The decline is attributed to impairments and portfolio actions, with further reductions possible through contemplated divestitures [49][50] Question: What is the outlook for orders in the first quarter? - Management expressed confidence in the health of the pipeline and the potential for order growth despite tough comparisons [51][52] Question: Can you elaborate on the margin improvement opportunities in EMEA and APAC? - Management noted that improvements will come from a combination of pricing discipline and ongoing deployment of the business system [62] Question: How does the transition from air cooling to liquid cooling affect content opportunities? - Management stated that the need for more cooling due to newer chips will increase the demand for chillers, maintaining strong opportunities in both air and liquid cooling solutions [66][67] Question: What is the strategic investment in Excelsius and its complementarity with the CDU? - The CDU launch is aimed at capturing significant market opportunities, while Excelsius anticipates future cooling needs for upcoming chip launches [94][95] Question: How is the company addressing accountability and KPIs? - Management is in the process of establishing enterprise KPIs to enhance accountability, with some tweaks to compensation structures being considered [84][85]

Financial Data and Key Metrics Changes - Fiscal 2025 saw a sales growth of 6%, with segment margins expanding by 100 basis points and adjusted EPS increasing by 17% [6][20] - Free cash flow conversion reached 102%, reflecting disciplined execution and financial strength [6][21] - The company ended the quarter with approximately $400 million in available cash, and net debt declined to 2.4 times compared to the prior year [21] Business Line Data and Key Metrics Changes - Organic revenue grew 4% in the fourth quarter, with segment margin expanding by 20 basis points to 18.8% [20] - Orders grew 6% in the quarter, with a notable 9% growth in the Americas, supported by strength in data centers [21] - In EMEA, orders increased by 3%, while APAC saw a small decline of 1% due to decreasing systems [22] Market Data and Key Metrics Changes - The backlog expanded by 13% to a record $15 billion, with system backlog growing by 14% and service backlog by 9% [21][24] - In the Americas, sales were up 3% organically, while EMEA delivered 9% organic growth [22] - APAC experienced a 3% organic sales decline, primarily due to lower volumes in China [22] Company Strategy and Development Direction - The company is updating its long-term growth algorithm to reflect improved mid-single-digit top-line growth and double-digit adjusted EPS growth [6][24] - The proprietary business system is being developed as a growth engine, focusing on customer-centric and continuous improvement [5][8] - The company aims to leverage strengths in HVAC controls and digital solutions to capture significant opportunities in decarbonization and mission-critical systems [19][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate evolving market conditions and achieve long-term growth commitments [26] - The guidance for fiscal 2026 includes expectations for mid-single-digit organic revenue growth and approximately 100% free cash flow conversion [25][26] - Management highlighted the importance of operational efficiencies and a record backlog in supporting future growth [25][26] Other Important Information - The company is focusing on investments in organic growth, returning capital to shareholders, and pursuing selective acquisitions [24] - Recent leadership changes include the appointment of a new leader for the Americas segment to sharpen customer focus [10] Q&A Session Summary Question: Can you walk through the 50% operating leverage target for 2026? - Management indicated that EMEA and APAC will be the main drivers of margin improvement, with a comfortable outlook for operating leverage in the 50s or above [28][29] Question: What are the opportunities for cost and portfolio improvements? - Management emphasized ongoing efforts to reduce G&A costs and improve productivity through the proprietary business system, with a vibrant acquisition pipeline [31][32] Question: Can you provide more detail on the $250 million benefits from operating leverage? - Management confirmed that the operating leverage will continue to improve over time, driven by productivity and responsible cost reductions [32][34] Question: What is the outlook for orders in the first quarter? - Management noted that the health of the pipeline continues to improve, with expectations for order growth despite tough comparisons [36] Question: How will the company achieve 100% cash flow conversion? - Management highlighted strong improvements in receivable management and inventory management as key drivers for free cash flow conversion [38][39] Question: What are the targeted actions for margin improvement in EMEA and APAC? - Management stated that margin improvement will come from a combination of pricing discipline, operational efficiency, and ongoing deployment of the business system [40] Question: How does the company view the content opportunity in data centers? - Management expressed confidence in the continued demand for both air and liquid cooling solutions, emphasizing the strength of their chiller offerings [41] Question: What is the impact of technology investments on aftermarket services? - Management indicated that technology investments are driving both share gain and margin improvement by lowering costs to serve [43] Question: Can you discuss the order growth from specific verticals? - Management noted strong growth in data centers, pharmaceuticals, and advanced manufacturing as key verticals driving backlog growth [45]

Financial Performance - The company achieved organic sales growth of 6% for the full year 2025[9], and 4% for Q4 2025[22], demonstrating broad-based strength across its operations[9] - Adjusted Segment EBITA margin expanded by 100 basis points to 171% for the full year 2025[9], and 20 basis points to 188% for Q4 2025[22] - Adjusted EPS increased by 17% year-over-year[9] from $321 in FY24 to $376 in FY25[39], successfully offsetting dilution from the R&LC divestiture[9] - Adjusted free cash flow conversion was strong at 102% for the full year 2025[9], validating disciplined capital allocation[9] - Q4 2025 adjusted EPS increased 14% year-over-year, from $111 to $126[24] Orders and Backlog - Orders grew by 7% for the full year 2025, with strong performance in the Americas offsetting softness in China[9] - Backlog grew by 13% to approximately $15 billion, providing visibility into future growth[9] Future Outlook - The company initiated FY26 adjusted EPS guidance of approximately $455, representing over 20% growth[9] - The company expects adjusted free cash flow conversion of approximately 100% for FY26[9] - For Q1 2026, the company anticipates organic revenue to be up approximately 3% and adjusted EPS to be approximately $083[43]

Corporate Earnings Drive Pre-Market Activity - Amgen Inc. reported a 12% increase in total revenues to $9.6 billion and non-GAAP EPS of $5.64, exceeding forecasts and leading to a 3% rise in stock [3] - Lumentum Holdings Inc. saw a 17% stock increase after reporting Q3 2025 EPS of $0.57 on revenues of $425.2 million, driven by growth in its Cloud and Networking segment [4] - Rivian Automotive, Inc. reported Q3 2025 revenues of $1.56 billion, surpassing estimates, with a narrower loss per share of -$0.65 and a 47% year-over-year increase in automotive sales [5] - Johnson Controls International plc reported an adjusted EPS of $1.05 and sales of $6.1 billion, representing a 6% organic increase year-over-year, with an 11% growth in backlog [6] - The New York Times Company added 460,000 digital-only subscribers, boosting total revenue by 9.5% year-over-year to $700.8 million [7] Media and Global Trade Developments - China's Foreign Minister announced willingness to negotiate a free trade agreement with the European Union, emphasizing cooperation over rivalry [9] - The New York Times Company demonstrated strength in digital transformation, contributing to its revenue growth [7] Crude Oil Markets Face Headwinds - WTI crude oil prices are trading near $60.59, facing downward pressure from a stronger U.S. dollar and increased U.S. crude inventories [10] - OPEC+ has paused output hikes for Q1 2026, agreeing to a modest increase in December, but market sentiment remains cautiously bearish [10]

Johnson Controls International shares rise after forecasting its strongest earnings growth in over five years, signaling persistent demand for data center cooling and decarbonization solutions. https://t.co/sPPPJQP4bI ...