Johnson Controls(US:JCI)2026-02-04 12:02Financial Performance - Q1 sales increased 7% to $5.8 billion, with organic sales growth of 6%[2] - GAAP EPS for Q1 was $0.90, while adjusted EPS was $0.89, reflecting a nearly 40% increase year-over-year[1][3] - Orders grew 39% organically year-over-year, with a backlog of $18.2 billion, up 20% organically[6] - Net sales for the three months ended December 31, 2025, reached $5,797 million, a 6.8% increase from $5,426 million in the same period of 2024[27] - Gross profit for the same period was $2,074 million, up from $1,926 million, reflecting a gross margin improvement[27] - The company reported a net income of $525 million for the quarter, compared to $451 million in the same quarter of the previous year[27] - Income from continuing operations attributable to Johnson Controls was $555 million, compared to $363 million in the prior year, representing a 52.9% increase[31] - Basic earnings per share attributable to Johnson Controls for continuing operations was $0.91, an increase from $0.55 in the previous year[27] Segment Performance - In the Americas, Q1 sales reached $3.8 billion, a 6% increase, with segment EBITA margin at 16.1%[7][8] - EMEA segment sales increased 9% to $1.3 billion, with adjusted segment EBITA margin expanding to 13.0%[9][10] - APAC segment sales rose 8% to $693 million, with segment EBITA margin increasing by 290 basis points to 16.9%[11][12] - Segment EBITA for the Americas in 2025 was $620 million, compared to $589 million in 2024, with an EBIT margin of 14.2%[48] - The company reported a segment EBITA margin of 16.4% for 2025, compared to 16.2% in 2024, indicating improved profitability[49] Cash Flow and Guidance - Cash provided by operating activities was $611 million, with free cash flow at $531 million[14] - The company raised its fiscal 2026 full-year adjusted EPS guidance to approximately $4.70, up from $4.55[17] - The company anticipates organic revenue growth of approximately 5% for the second quarter of fiscal 2026[17] - Free cash flow for 2025 is reported at $531 million, significantly up from $133 million in 2024, showing a conversion rate of 96%[45] - Adjusted free cash flow for 2025 stands at $428 million, down from $603 million in 2024, with a conversion rate of 77%[46] Assets and Equity - Total assets as of December 31, 2025, were $37,983 million, slightly up from $37,939 million at the end of September 2025[29] - Shareholders' equity attributable to Johnson Controls increased to $13,204 million from $12,927 million[29] - Cash and cash equivalents at the end of the period were $552 million, down from $1,237 million at the end of the previous year[31] Debt and Financial Ratios - Total debt decreased to $9,705 million as of December 31, 2025, down from $9,880 million on September 30, 2025, and $9,993 million on December 31, 2024[51] - Net debt to income before income taxes improved to 4.0x for the twelve months ended December 31, 2025, compared to 4.8x for September 30, 2025, and 5.4x for December 31, 2024[51] - Net debt to adjusted EBITDA improved to 2.2x for the twelve months ended December 31, 2025, from 2.4x for September 30, 2025, and 2.3x for December 31, 2024[51] - Current portion of long-term debt remained stable at $568 million for December 31, 2025, compared to $566 million for September 30, 2025, and increased from $522 million for December 31, 2024[51] - Short-term debt decreased significantly to $436 million as of December 31, 2025, from $723 million on September 30, 2025, and $882 million on December 31, 2024[51] Corporate Actions - The company completed the sale of its ADT Mexico Security business for net proceeds of $207 million, recognizing a pre-tax gain of $70 million[14] - The company completed the divestiture of its Residential and Light Commercial HVAC business in July 2025, which is classified as a discontinued operation[33]