Why Johnson Controls Stock Is Down Today

Core Viewpoint - Johnson Controls International (JCI) reported earnings that exceeded expectations but faced challenges in the Chinese market, leading to a decline in stock price [1][2]. Financial Performance - In the fiscal second quarter ending March 31, Johnson Controls earned $0.78 per share on revenue of $6.7 billion, surpassing Wall Street's earnings estimate by $0.03 per share, although revenue was approximately $20 million below expectations [2]. - North America showed strong performance with a 9% increase in sales and a 110 basis point improvement in profit margin year over year [2]. - Revenue from the Asia/Pacific region declined by 26% due to ongoing weakness in China, impacting the company's profit margin in that area [2]. Future Outlook - Management forecasts fiscal third-quarter earnings between $1.05 and $1.10 per share, which is below Wall Street's consensus estimate of $1.12 per share [2]. - The company maintains its full-year earnings guidance of $3.60 to $3.75 per share, suggesting potential to meet or exceed the market's average estimate of $3.60 per share [2]. Market Sentiment - Investors reacted negatively to the earnings report, with shares dropping by 7.6% in morning trading, reflecting concerns about the company's performance in the latter part of the year [1][2]. - The management's reliance on favorable conditions in the fourth quarter raises uncertainty, particularly regarding demand in North America and recovery in China [3].