What's in Store for Johnson Controls (JCI) in Q1 Earnings?
Johnson Controls JCI is scheduled to release first-quarter fiscal 2023 (ended December 2022) earnings numbers on Feb 1, before market open.
The Zacks Consensus Estimate for fiscal first-quarter earnings has remained steady in the past 60 days. The company has a decent earnings surprise history, having outperformed the Zacks Consensus Estimate in two of the preceding four quarters, while matching estimates in the other two.
Let’s see how things have shaped up for Johnson Controls in the fiscal first quarter.
Johnson Controls International plc Price and EPS Surprise
Johnson Controls International plc price-eps-surprise | Johnson Controls International plc Quote
Factors to Note
Johnson Controls’ fiscal first-quarter performance is likely to have been aided by the June 2022 acquisition of Tempered Networks. Pricing actions are likely to have supported its margin performance. For first-quarter fiscal 2023, Johnson Controls expects the adjusted segment EBITA margin to improve 120 to 130 basis points year over year.
Favorable government incentives across the world, global heat pump demand and continued backlog strength are likely to have supported Johnson Controls’ performance in the to-be-reported quarter.
The Building Solutions North America segment is expected to have benefited from growth in project-based business and continued improvement in HVAC & Controls. The Zacks Consensus Estimate for Building Solutions North America segment indicates a 10.8% increase from the year-ago reported number. We expect segmental revenues to increase 6.2% from the year-ago reported number.
Strong demand for HVAC & Controls is expected to have driven performance of the Building Solutions Asia Pacific segment. The Zacks Consensus Estimate for segmental revenues in the fiscal first quarter suggests a 3.1% increase from the year-ago reported number.
The Global Products segment is expected to reflect higher revenues on the back of strong price realization and continued growth in Light Commercial, Residential HVAC and Fire Detection products. We expect Global Products revenues to climb 10.1% from the year-ago reported figure.
However, supply-chain constraints and commodity inflation are likely to have impacted JCI’s fiscal first-quarter performance. Additionally, foreign-currency woes might have hurt the top line.
What Does the Zacks Model Say?
Our proven model does not conclusively predict an earnings beat for Johnson Controls this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates, which is not the case here, as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Johnson Controls has an Earnings ESP of -1.13%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Johnson Controls currently carries a Zacks Rank #4 (Sell).
Highlights of Q4 Earnings
Johnson Controls reported fourth-quarter fiscal 2022 adjusted earnings of 99 cents per share, in line with the Zacks Consensus Estimate. The bottom line increased 12.5% year over year. Total revenues of $6,725 million missed the Zacks Consensus Estimate of $6,782 million. The top line increased 5.2% year over year.
Stocks to Consider
Here are some other companies within the broader Industrial Products sector that you may want to consider, as according to our model, these have the right combination of elements to beat on earnings this reporting cycle.
Caterpillar CAT has an Earnings ESP of +1.14% and a Zacks Rank #3. The company is scheduled to release fourth-quarter earnings numbers on Jan 31.
The Zacks Consensus Estimate for Caterpillar’s fourth-quarter earnings has been revised upward by 17.6% in the past 90 days. CAT pulled off a trailing four-quarter earnings surprise of 14.7%, on average.
IDEX Corporation IEX has an Earnings ESP of +2.96% and a Zacks Rank #2. The company is slated to release fourth-quarter financial numbers on Jan 31.
The Zacks Consensus Estimate for IDEX’s fourth-quarter earnings has been revised upward by 1.5% in the past 90 days. IEX delivered a trailing four-quarter earnings surprise of 5.7%, on average.
Xylem XYL has an Earnings ESP of +2.10% and a Zacks Rank #3. The company is set to release fourth-quarter results on Feb 7.
The Zacks Consensus Estimate for Xylem’s fourth-quarter earnings has been revised upward by a penny in the past 90 days. XYL pulled off a trailing four-quarter earnings surprise of 13.3%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Caterpillar Inc. (CAT) : Free Stock Analysis Report
Johnson Controls International plc (JCI) : Free Stock Analysis Report
IDEX Corporation (IEX) : Free Stock Analysis Report
Xylem Inc. (XYL) : Free Stock Analysis Report
To read this article on Zacks.com click here.