Johnson Controls Q2 Earnings & Revenues Top Estimates, Increase Y/Y

Core Insights - Johnson Controls International plc (JCI) reported adjusted earnings of 82 cents per share for Q2 fiscal 2025, exceeding the Zacks Consensus Estimate of 79 cents, marking a 19% year-over-year increase [1] - Total revenues for continuing operations reached $5.68 billion, surpassing the consensus estimate of $5.64 billion, with a year-over-year increase of 1.4% and organic revenue growth of 7% [1] Segment Performance - Building Solutions North America: Revenues were $2.92 billion, up 6% year over year, with organic sales increasing 7%, driven by strong HVAC and controls performance. Adjusted EBITA rose 5% to $390 million [2] - Building Solutions Europe, Middle East, Africa/Latin America: Revenues totaled $1.09 billion, a 2% year-over-year increase, with organic sales climbing 5%. Adjusted EBITA surged 53% to $136 million [3] - Building Solutions Asia Pacific: Revenues increased 10% to $542 million, with organic sales growing 13%. Adjusted EBITA was $79 million, up 46% year over year [4] - Global Products: Revenues were $1.13 billion, down 13% year over year, but organic sales increased 8%. Adjusted EBITA rose 9% to $343 million [5] Financial Metrics - JCI's cost of sales decreased 1.9% year over year to approximately $3.6 billion, while gross profit increased 7.5% to $2.1 billion, resulting in a margin increase of 220 basis points to 36.5%. Selling, general and administrative expenses were $1.4 billion, down 30.9% year over year [6] - As of March 31, 2025, JCI had cash and cash equivalents of $795 million, up from $606 million at the end of fiscal 2024. Long-term debt increased to $8.2 billion from $8 billion [7] - In the first half of fiscal 2025, the company generated net cash of $799 million from operating activities, compared to a cash outflow of $437 million in the prior year. Free cash flow was $589 million, a significant improvement from a cash outflow of $647 million in the previous year [8] Future Guidance - For Q3, JCI anticipates mid-single-digit organic revenue growth and an adjusted segment EBITA margin of approximately 17.5%. Adjusted earnings are expected to be in the range of $0.97-$1.00 per share [9] - For the full fiscal year 2025, JCI expects organic revenue growth in the mid-single-digit range, an adjusted segment EBITA margin improvement of 90 basis points, and adjusted earnings of about $3.60 per share, with free cash flow conversion expected to be approximately 100% [11]