Johnson Controls Q3 Earnings & Revenues Top Estimates, Increase Y/Y

Core Insights - Johnson Controls International plc (JCI) reported adjusted earnings of $1.05 per share for Q3 fiscal 2025, exceeding the Zacks Consensus Estimate of $1.00, with an 11% year-over-year increase [1][9] - Total revenues for continuing operations reached $6.10 billion, surpassing the consensus estimate of $5.99 billion, marking a 3% year-over-year increase, while organic revenues grew by 6% [1][9] Q3 Segmental Results - Americas: Revenues were $4.04 billion, flat year over year, with organic sales increasing by 7%, driven by strong performance in HVAC and controls businesses. Adjusted EBITA rose by 0.4% year over year to $746 million [2] - EMEA: Revenues totaled $1.27 billion, up 8% year over year, with organic sales climbing 4% due to growth in Applied HVAC and fire and security businesses. Adjusted EBITA increased by 16% year over year to $179 million [3] - APAC: Revenues increased by 7% to $737 million, with organic sales growing by 6%, driven by the service business. Adjusted EBITA was $143 million, up 12% year over year [3] Margin Profile - JCI's cost of sales increased by 0.4% year over year to approximately $3.81 billion. Gross profit rose by 6.5% year over year to $2.25 billion, with the margin improving by 130 basis points to 37.1%. Selling, general and administrative expenses were $1.42 billion, up 58.3% year over year [4] Financial Position - As of June 30, 2025, JCI had cash and cash equivalents of $731 million, up from $606 million at the end of fiscal 2024. Long-term debt increased to $8.45 billion from $8 billion at the end of fiscal 2024 [5] - In the first nine months of fiscal 2025, the company generated net cash of $1.59 billion from operating activities, compared to $216 million in the prior year. Free cash flow reached $1.28 billion, reversing an $83 million outflow from the previous year [6] Q4 Guidance - JCI anticipates low-single-digit organic revenue growth compared to the previous year. Adjusted segment EBITA margin is estimated to be approximately 18.6%, with adjusted earnings expected to be in the range of $1.14-$1.17 per share [7] FY25 Guidance - The company expects organic revenue growth to be in the mid-single-digit range from the prior year, with an adjusted segment EBITA margin improvement of 90 basis points. Adjusted earnings per share are projected to be $3.65-$3.68, with adjusted free cash flow conversion expected to exceed 100% [10]