Johnson Controls International plc (JCI) on Q2 2021 Results - Earnings Call Transcript
Operator: Welcome to the Johnson Controls’ Second Quarter 2021 Earnings Call. Your lines have been placed on a listen-only, until the question-and-answer session. . This conference is being recorded. And if you have any objections, you may disconnect at this time. I will now turn the call over to Antonella Franzen, Vice President, Chief Investor Relations and Communications Officer. Antonella Franzen: Good morning and thank you for joining our conference call to discuss Johnson Controls’ second quarter of fiscal 2021 results. The press release and all related tables issued earlier this morning as well as the conference call slide presentations can be found on the Investor Relations portion of our Web site at johnsoncontrols.com. George Oliver: Thanks, Antonella, and good morning, everyone. Thank you for joining us on today’s call. I will start with a brief strategic update while adding a few specific areas related to our growth initiatives. Olivier will provide a detailed review of Q2 results and update you on our forward outlook. We will leave as much time as possible to take your questions. Let's get started on Slide 3. We delivered another quarter of solid financial performance. Organic sales and order growth reflected positive as anticipated, which when combined with our ongoing commitment to operational excellence enabled us to grow EBIT by more than 20% year-over-year. Despite some challenges in the macro environment, inflationary pressures, supply chain disruptions, and the lingering impacts of COVID-19, trends across most of our end markets continue to improve, and we continue to gain share. We have maintained an incredible level of engagement with our teams globally, as well as with our customers and partners. And we continue to execute on all of our strategic initiatives; expanding our service attachment rate and driving higher recurring revenue, enhancing and connecting our installed base with our digital OpenBlue platform and advancing our role in addressing the environmental needs of our customers. Lastly, as promised, we are announcing our cost of goods reduction program on today's call, which targets $250 million in run rate savings by fiscal 2023. In combination with the SG&A actions we announced earlier this quarter, we expect to deliver $550 million in net savings, which provides significant margin expansion over the next several years. These actions are a testament to our commitment of continuous improvement and will enable us to close our margin gap versus peers. Olivier Leonetti: Thank you, George, and good morning, everyone. Continuing on Slide 10, organic sales inflected positive as anticipated in Q2 at 1% overall with strong growth in global products and underlying trends improving across our field businesses. The strength in global products was driven by continued high levels of demand in residential end markets, not only in our HVAC equipment business but also in security products. Operator: Thank you. . And our first question is from Nigel Coe, Wolfe Research. Your line is open. Nigel Coe: Thanks. Good morning, everyone. George Oliver: Good morning, Nigel. Nigel Coe: This has been a strange quarter for . So yes, first of all, just want to touch on the COGS and SG&A actions. I'd be curious, what prompted the sort of the second round of efficiency programs and what prompted the review? And is it a case of having lived through COVID and remote working that you've found more efficient ways of doing things in the case of Olivier coming in and having a fresh look? I mean what prompted these actions? Olivier Leonetti: So, Nigel, good morning. Thank you for your question. After the merger -- following the merger, we created the conditions to go to another level of profitability improvement. And when I started, George asked us to now look at levers to close the productivity gap to our competition. So that was the driving force. And that was communicated, Nigel, about seven months ago. So we have been -- and we said we will go and update you as plans are unfolding. So first was SG&A. And today is our COGS plan. And as you can see from the numbers, Nigel, we believe we are going to add significant profit to the bottom line and we are well on track to close the gap to our competitors. George Oliver: And, Nigel it's really a continuation of the work that we did with the integration. We've got strong fundamentals now across the board. We've got the right leadership team. And then the work that we've been doing, we recognize that there's a significant opportunity to continue to improve. And what we've done as a team is be able to – to be able to detail that, and then we're very confident that we're going to be positioned to be able to deliver on those benefits. Nigel Coe: Great. Thanks, George. Thanks, Olivier. And then service orders down 3%. So I recognize the backlog is up. So maybe just talk about what caused that decline? Just given the initiatives you have in train to drive growth in services. And I heard transactional was within a bit of pressure in North America. But what is your confidence that orders start to impact positive from here? George Oliver: Nigel, as you know, we have an incredible base of service, over $6 billion. And what I would say here, with the service strategies that we've been executing, I'm incredibly proud of the progress we've made. It's one of our biggest growth sectors. It's being able to increase market coverage, enhance technology with OpenBlue, create new service capabilities, really now being able to leverage the underserved install base, and then ultimately deliver very attractive margin profile. When you look at the quarter, service orders were down slightly. And it's mainly just timing of conversion. We had an extremely strong March, which is continuing in April. Our service pipeline is up double digits. And then with the site access improving, that's also helping us to accelerate our L&M and our L&M contracts, which is labor and materials. And for our attach rate, when you look at our attach rate for service with our install projects is up significantly, up 300 basis points year-to-date. And so when you look at our backlog up 5%, the strong pipeline, and then the work that we've done executing on our strategy, we're very well positioned for a strong double digit second half in both orders and revenue. Nigel Coe: Thanks, George. I’ll leave it there. Operator: Thank you. Our next question is from Gautam Khanna with Cowen. Your line is open. Gautam Khanna: Yes. George, I wanted to ask in your opening remarks, I think you talked about supply chain constraints and wanted you to expand on that. And just did it actually prevent you guys from delivering equipment in the quarter, maybe if you have any sort of quantification of how that manifested in first quarter results. And then I have a follow up. George Oliver: Yes, Gautam, our team is doing incredible work across our supply chain as we're working to be able to support what we see to be an accelerating pipeline of opportunities across our businesses. We’re gaining share in every platform. And so as we're working to make sure that we've got secured components and materials to be able to support that new demand, certainly we're working it hard. I believe that our team has done a good job to mitigate most of the impact. I think where we’re seeing significant demand in residential, unitary as well as commercial unitary product, we're continuing to work that and not only expand our supply chain, but also our manufacturing footprint. And so we're working through that. Our backlogs are up in those businesses are record highs. And so we are working to continue to accelerate our supply chain to be able to address and support the increasing demand. But overall, I'm very proud of the team and the work we've done to be able to support our customers and ultimately deliver on the product that's being demanded. Gautam Khanna: And just as a follow up, George, any quantification of specific IAQ orders that you guys have in the quarter and perhaps any color on the front log of opportunities that are in IAQ specific? Thank you. George Oliver: Yes. When you look at the progress we're making with OpenBlue across the board, not only digitizing our core business but now being able to -- with the data that's being extracted and the solutions that now we're bringing to the market, truly now positioning us to capitalize on these significant accelerating trends. So when you look at healthy buildings, our OpenBlue Healthy Buildings launched in mid January with a solution portfolio of over 25 unique products and services, which is targeted at healthy people, places, planet. The market opportunity continues to grow. We originally sized it at $10 billion to $15 billion, and that continues to increase. Our pipeline is nearing $1 billion. Year-to-date, we've secured over $150 million. We expect this to continue to play through with a few 100 million in 2021. We've partnered with schools. We've got an incredible base of business with K-12 schools. We're working closely where we have presence with over 6,000 districts. We're working with sports venues and the like to bring back people to sports events. And so when you look at what we're doing, it's really a robust approach that ultimately starts with a detailed assessment, and then through monitoring, remote maintenance and optimization that we can do, ultimately driving the best solution. And so we're extremely excited. And then lastly, with OpenBlue in general, across the board, it's really translating to multiple elements. It's improving our service attach rates. It's improving profitability in our businesses with the book margins that we're booking. It's making us more competitive now in the overall smart buildings with our leadership and sustainability and decarbonization, which I talked a little bit about in my prepared remarks. And then the overall acceleration of digitization within our existing service base through connectivity, going back and getting our install base connected, is giving us an incredible platform now to become much more intimate with our customers and bring our new capabilities to really change the game and how we serve them. Gautam Khanna: Thank you. Operator: Thank you. Our next question is from Jeff Sprague with Vertical Research. Your line is open. Jeff Sprague: Thank you. Good morning, everyone. George Oliver: Good morning, Jeff. Jeff Sprague: Good morning. Two questions for me. First one, it looks like you're telling us you're going to absorb these cash restructuring costs and still convert at 100% free cash flow conversion. I just want to confirm that's the case. And if so, what's really allowing you to do that? I guess it has to be working capital. And if it is, maybe you could elaborate a little bit more on the working capital opportunity that's bridging you across that. Olivier Leonetti: Good morning, Jeff. So you're right. The 100% free cash flow will include both the restructuring cash impact of our SG&A and COGS programs announced today. You're right. More profit will be part of how we get there and also enhanced working capital. If you look at today, for the second quarter, we have improved cash conversion cycle by about 24 days; eight in DSO, about 11 days in DIO inventory and about five days in DPO. And we have built over the quarters even before I took the position, a great machine to have a high focus on working capital. And you see that keep delivering. And we are actually very confident in our ability to deliver a 100% free cash flow this year, but also the following years. If you do some math, Jeff, just in the first half, we are converting at 140%. So we have quite fair headroom to now achieve 100% for the year. Jeff Sprague: Great. And then maybe secondarily, just on the COGS program, the mix of savings are interesting. I guess if I was going to feel the guess of where the costs would come out, I would have surmised maybe more in manufacturing and distribution and less so in field labor. I wonder if you could just kind of address the manufacturing and distribution piece. It looks like you've got a $3.2 billion cost base there if I'm interpreting the chart right and you're targeting $70 million of savings there. I guess these plans might not be fully mature after a kind of a seven-month exercise, but would there be kind of more room in some of these numbers as you look forward? Olivier Leonetti: So a few things. We said it. I'm going to repeat it. Those savings are net. Meaning they would flow to the bottom line. If you look at the mix, our team has done a great job in managing direct materials over the few quarters and we think now the biggest opportunity, that's why we have announced the numbers we have announced are in the standardization of our field operation across all the elements of field operation; install, services and procurement. Now the other question was, is there more possible? That's, of course, the case. We want to be prudent. And we keep informing you as we go through the quarters, but we have a high level of confidence in our ability to execute this COGS program. George Oliver: And, Jeff, I think it's important to note that as we went through the integration, we developed a robust operating system for the field, which enables us to be able to take all of what we do to put into that one operating system. And then would that globally be able to focus on the variation at each one of the cost levels, and be able to drive improvement. So the work that we've done is we actually have that detail to that level across the board and how we're driving improvement within that operating system for our field-based businesses. Jeff Sprague: Great, thanks. Very encouraging. Good luck. George Oliver: Thank you. Operator: Thank you. Our next question is from Scott Davis with Melius Research. Your line is open. Scott Davis: Hi. Good morning, everybody. George Oliver: Good morning, Scott. Scott Davis: I’m curious kind of logistically and otherwise what an outcome-based contract really looks like? Are you defying getting cash in the door? How long does it take to kind of prove the outcome that you're promising? Can you walk us through at a high level without giving away your trade secrets here or contract secrets, but can you walk us through at least at a high level what a contract like that looks like? I'll just leave it at that, George. George Oliver: Yes. So, Scott, it's similar to our performance contracting that we have today where we ultimately do a survey of a customer site. We identify opportunities to be able to reduce energy, improve operations and the like. And when we do that, there's significant improvement to be made. Buildings historically have been very inefficient. They've been very energy intensive. And so our opportunity here is to be able to create an outcome, energy savings, higher operations, and then do that. In some cases, we bring in financing for the project, and ultimately then get a recurring revenue that goes over. It can be over 10, 15, 20 plus years depending on the type of projects. These are great returns, great recurring revenue that's tied to that initial install project, and ultimately delivering on the outcome. And our track record in being able to deliver on the commitments that we make with these types of contracts is extremely high. So we do manage a bit of risk, but it's relatively low and we ultimately make sure that with the technologies and capabilities that we provide, that we deliver on the outcome that we commit. Olivier? Olivier Leonetti: One statistic, Scott, and we haven't disclosed this before. If you look at the energy saving performance market in the U.S., which is a 4 billion market, the company has a market share which is 50% higher than our number two competitor. So we have a strong position in the energy saving outcome-based market, and we believe that we're going to leverage this capability going forward as buildings decarbonize across the planet. George Oliver: Scott, I think it's important to understand that today, buildings are about 40% of the carbon footprint globally, and about 75% of that is operational. And so when commitments are being made to get to net zero carbon emissions, buildings become very important in how they ultimately drive towards getting to that outcome. And so we have an incredible opportunity with the capabilities that we have now with the -- not only what we've done historically with performance contracting, but now with OpenBlue to bring together holistically complete systems that with the use of the data, we can drive a lot of optimization in what we ultimately deliver for the customers to be able to meet their objectives. Scott Davis: It totally makes sense. Is it harder to collect in those contracts? Is there kind of disagreements of what the data shows and the sustainability of that? And with the savings, it seems like there would be some gray area items in there, but perhaps I'm wrong. George Oliver: Scott, it's the opposite. It's very predictable. And I think our track record relative to the projects that we've executed, that has been very strong. So we make sure that as we look at these type of projects with the customers that we're doing these projects for, that we're obviously mitigating any risk and ultimately focus on executing on the commitments that we make. Scott Davis: Perfect. Thank you for the clarification. Good luck and congrats, guys. I’ll pass it on. George Oliver: Thanks, Scott. Operator: Thank you. Our next question is from Steve Tusa with JPMorgan. Steve Tusa: Hi. Good morning, guys. George Oliver: Good morning, Steve. Steve Tusa: Can you just talk about a little bit more about price cost? What was the spread in the quarter and how you're seeing kind of pricing and costs evolve over the next couple of quarters? And is there any – given your kind of fiscal year-end timing, any leakage into next year? George Oliver: Yes, Steve, let me start and I'll turn it over to Olivier for some of the more – more of the details. But as you know, over the last three years, we've really built strategic pricing capability across the company. And if you look at the last couple of years, we were able to be able to deliver net 100 basis points on the top line as a result. That has served us extremely well as we get into the cycle with accelerating inflation. So with that, we have improved discipline in the field. We're executing projects better at better margin rates. And then within our product businesses where you see the impact sooner because of the material costs, we've been able to have a very dynamic pricing model that has been deployed across each one of our platforms to ultimately not only see what's happening in the near term, but longer term being able to be very dynamic in how we pass that along into the channels. And so to date, we've -- in the second quarter, we had about a 30 basis point benefit. And we believe that the work we're doing, not only in productivity, VAVE, direct material productivity, designing material costs out of our products and then ultimately driving just improved productivity across the entire supply chain, that we're still in a position to be net positive here in the second half. Olivier? Olivier Leonetti: No, nothing more to add, Steve. And when you look at the Slide 19, when we say 30 basis point base margin improvement, we are factoring also our best view on next year price cost, but we have a great process across the organization to maintain that going forward in this very fluid environment. Steve Tusa: Okay. Any other mechanical items for next year that we should be aware of as you've moved through this year that flip either positive or negative outside of the kind of obvious restructuring and the activities you've already kind of talked about? Olivier Leonetti: Nothing more than what we all read in the news. It's still a freed environment. We feel very bullish about how the economies across the world are rebounding. George mentioned that earlier in this call. Our order flow is increasing significantly. And something important, if you look at our install business, which is about 35% of the revenue of the organization, we see this business now growing, and that is done at the back of the retrofit market. Usually, 50% of install is associated with new buildings. The new buildings today are depressed. So as this new building is starting to rebound, and it is in the U.S. and across the world, we see our business really taking momentum, and that will translate into, of course, more global products, products being sold, higher service mix. So we feel very positive about what we see in front of us. Steve Tusa: Great. Thanks a lot. I appreciate it. Operator: Thank you. Our next question is from Julian Mitchell with Barclays. Your line is open. Julian Mitchell: Hi. Good morning. George Oliver: Good morning. Julian Mitchell: Morning. Maybe a first question around fire and security. You've got good sort of recovery trends, very evident on the HVAC side of the house. Fire and security sales still down mid-single digit. So maybe help us understand how you see the slope of that recovery from here? And perhaps how big of an impact is the sort of retail piece in there as a headwind? George Oliver: Yes. Julian, let me start by just framing up fire and security and what we saw in the quarter and what it means as we go forward. It is about 40% of our total revenues. It's core to building systems. It's got a very attractive margin profile due to the product and service mix. We've got a large installed base, which ultimately drives the recurring revenue. And this combined now with OpenBlue, we can truly differentiate what we do longer term to get a higher percentage of that recurring revenue. And security now in the new world, in the digital world, that now is becoming a critical asset as we think about our smart buildings to be able to collect data and apply analytics. When you look at the sequential trends, our short cycle business in fire and security is up nicely. When you look at products -- total products is going to be up -- it's up about low to mid-single digits. And then our service actually inflected positive in the field businesses, which, as you know, because of all of the shutdowns, we had a lot of difficulty over the last few quarters to be able to get in and perform the service. So I think as we go forward, those trends on the shorter cycle is coming through very nicely. And then on the install side, as these new projects that come into market, both in retrofit and in install, which are longer cycle, we're getting more than our fair share on that. So as they're coming to market and these projects start to be deployed, we're very well positioned to be able to start to pick up the install revenues. But I would tell you the shorter cycle piece is actually performing very well. And so even though the install revenues were down, it's mainly just a function of timing, of conversion, and we see the orders now picking up very nicely in the second half. Julian Mitchell: Great. Thank you. And then maybe switching to a topic that's relevant across the company. There's a lot of interest, obviously, in the U.S. education stimulus money that could flow over the next three years. Maybe help us understand what the scale of JCI's exposure is to that education vertical as you're looking across the field and global products business? George Oliver: Yes, Julian, let me summarize it quickly here. The three large COVID relief packages, they totaled about $5 trillion in aid over the last 12 months, much needed relief for our customers. We were very active in participating in making sure as those bills were put together, that certainly was focused on healthy buildings and making sure that as we -- whether it's bringing students back to the school room or the like or buildings, we're very actively involved in making sure that the details of what was going to be needed to be able to address some of the new challenges were actually incorporated in the bills. And when you look at the funding directed to upgrading facilities in the vertical markets that we have the highest exposure and deep relationships, it is K-12, higher ed and then state and local government, which play to our strengths. And so when you look at your question on education, K-12, we have relationships across North America or the U.S. with about 6,000 school districts, and then at the higher ed level, about 1,900. They all -- this all plays right into our strengths. And so in K-12 alone, there's been about $195 billion allocated. And so what we've done is making sure that not only right from the frontend of building the build to now executing state-by-state with what we have as a program management office, we're making sure we're detailing all of the flow of that stimulus and that we're positioned to be able to address the challenges that they're going to deploy that stimulus to be able to address. And so we think the TAM for the U.S., you're in billions of dollars relative to the opportunity that we see as we're going after this. And the healthy -- and healthy buildings market itself, we said it was originally 10 to 15. That continues to be expanded with the stimulus' coming into the market. So we believe that we're in the early stages with the pipeline that we see, that it's in the hundreds of millions of dollars that we can be well positioned to execute on. Antonella Franzen: And Julian, I would just add that when you look at education, it is a big vertical for JCI overall. And particularly when you look at North America, it's about 20% of the revenue. Julian Mitchell: That’s great. Thank you. Operator: Thank you. Our next question is from Josh Pokrzywinski, Morgan Stanley. Your line is open. Joshua Pokrzywinski: Hi. Good morning, guys. George Oliver: Good morning, Josh. Joshua Pokrzywinski: George, if you wouldn't mind just kind of taking a step back, I know with the nature of the field business and kind of the mix of fire and security and HVAC in there sort of makes benchmarking tough. But if I look at what we've kind of seen so far through the first quarter, it seems like maybe from an orders perspective, commercial HVAC is running up kind of mid-teens at the market level. I think you mentioned low double digits in applied North America, but what's your sense on kind of the product side of commercial HVAC and where we should sort of see order rates here, whether it's this quarter or kind of here in the medium term? George Oliver: Josh, I think as you look at our mix, certainly, we're a longer cycle with the installs service part of our portfolio. But as you dig into the specific products in every category, we're gaining share. So if you look into, for instance, in the unitary business in the commercial side, new orders in North America for equipment for the rooftops is up mid-teens and with March up over 30%, our backlog is up 100%. Now those orders are in our product-based business. So you wouldn't see those orders. It's in the -- obviously inherent in the book and bill. And then when you look at our unitary share, we're up about 40 basis points year-over-year. And so as we look at the backlog being up 100% and the projected growth here in the third quarter, in North America unitary, we're projecting we're going to be up 30% plus in the quarter and third quarter. So that would be the commercial side. On the residential side, our orders were up again about 88%, record level of backlog there. Our sales were up about 35% with our units were up over 40%. We're seeing strong sell-through through that channel. We're going to see continued strength in Q3 and Q4. And so that's continuing. When you look at -- and the same holds true in our Hitachi business in Asia Pac. We got strong double digit revenue there, mainly driven by Japan, and that's been because of a gain share with our new product introductions. And then when you look at -- even in North America, when you look at even though our installs showed our orders were up about 5%, and underlying those orders in North America, we saw mid teens growth in applied equipment orders. So that is going to play out very nicely for us in the second half and ultimately set us up for increased service attach and service revenue going forward. So you got to look at the details to understand that in every category, whether it be through our distribution or as we now set up our install business that we're setting it up for the longer term that's going to be very attractive. And just building off one thing that Olivier said, when you look at our install business, we have significantly outperformed through this cycle. With the non-resi construction down as much as it is, we were able to actually fill most of that void with short-term retrofit upgrade orders, which in North America alone were up 20% in the quarter. Now we're seeing a fundamental that with the short-term demand, that's going to continue. It's going to continue around healthy buildings and sustainability projects. That's going to now combine with what we see happening in non-residential new demand coming through. This is the first that I've seen the two coming together, and it's going to play out very well in the second half for strong orders as well as beginning to convert to strong revenue in the second half. Olivier Leonetti: And Josh, and one statistic again, which gives – allows you to put all that together, global products in aggregate for next quarter we believe we're going to be able to grow revenue in the 20% plus range. So that gives you an idea about what is going on around all the elements of the portfolio, 20% plus revenue year-on-year growth expected. Joshua Pokrzywinski: That's super color. Maybe just one follow up on Scott's question on performance contracting. George, I think to your point, this is a business that you guys have been around in for decades now. I'm surprised that given how compelling that is for a customer that the industry isn't bigger or JCI's exposure to that isn't bigger. It almost seems kind of like a free upgrade providing you a bond support to get that work done. What's been kind of the bottleneck to that historically? George Oliver: It's a great question. So we're working with all of our customers. And historically, a big customer has been the government, both at the federal level, at the state level and at the local level with our 3P type contracts and performance contracts. And so we've been working with them and some of it is how they account for the projects and ultimately, how they look at it as an upfront cost and how they account versus an ongoing operational cost. And so we've been very active working with our customers to make sure that they're addressing some of their internal challenges that get in the way of doing a contract like this, which is very attractive in being able to get returns that pay for the cost of capital. And so we're working to really start to create that market above and beyond what it is today. And we believe that we're very well positioned to be able to then capitalize on that opportunity, Josh. Joshua Pokrzywinski: Perfect. Thanks, George. Good luck, guys. Operator: Thank you. And our final question comes from Andy Kaplowitz with Citigroup. Your line is open. Andrew Kaplowitz: Hi. Good morning, guys. George Oliver: Good morning, Andy. Andrew Kaplowitz: Morning. Olivier, can you give us a little more color on how to think about the 550 basis points of total cost out and what it actually means for incrementals over the next few years? It looks like inclusive of the core margin improvement of 30 basis points that you're dialing in on average, do you think you can get something like 300 basis points of margin improvement over the three-year period with an average 100 basis points and core incrementals in the 40% plus range? But I just want to sort of confirm those numbers. Olivier Leonetti: Good morning, Andy. Your numbers are absolutely correct. If you remove Silent-Aire in the next fiscal and the one after that would be in the 40% incremental. After that, we believe we will have created the conditions to deliver on our 30% incremental. And we will unpack -- we gave you a lot of data already, Andy, and we'd give you even more on Investor Day in September. Andrew Kaplowitz: Very helpful. And then Olivier, maybe a follow up in terms of -- we know that JCI is obviously an inverted company. So we wouldn't expect a big impact from Biden's corporate tax win. But how are you thinking about the resiliency of your tax rate if there is some kind of global minimum tax agreement? And what kind of levers can you pull to maintain your relative low tax rate advantage? Olivier Leonetti: So the situation is fluid. All of us are reading the papers. All of us have insights on what could happen. So one, we are, of course, committed to the 13.5% tax rate for this fiscal. And going forward, we have ran various scenarios. We are highly confident that our tax rate will remain competitive relative to the industry. And we have various levers to achieve that. Some of it is, of course, where we are registered as a company and the complexity of our legal entity structure. We believe it's going to be and remain a competitive advantage. Andrew Kaplowitz: Very helpful, Olivier. Thank you. Olivier Leonetti: Thank you, Andy. Antonella Franzen: George, would you like to do some final comments? George Oliver: Yes. Let's wrap up the call this morning. As I mentioned earlier, we've had a very strong first half of the year and the momentum we are seeing across our portfolio coupled with our strategic focus and improved execution gives me high confidence in our ability to be able to outperform as we go forward. I hope you and your families continue to remain safe, and I look forward to speaking with many of you soon. So with that, operator, that concludes our call. Operator: Thank you. This does conclude the call. You may disconnect your lines, and thank you for your participation.JCI Ratings Summary
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Johnson Controls International Reported Q4 EPS Beat, Better-than-Expected 2022 Growth
Johnson Controls International plc (NYSE:JCI) reported its Q3 results, with EPS coming in at $0.88, beating the consensus estimates, but quarterly revenue of $6,395 million (up 7% year over year) was below the Street estimate of $6,419 million.
Analysts at Oppenheimer believe organic growth outperformance vs. peers can sustain on a multi-year basis, leveraging accelerating product launches and OpenBlue’s differentiated value proposition.
The analysts anticipate relative multiple expansion over coming quarters as the company’s improved positioning and growth prospects materialize in continued above-market growth.
