Johnson Controls International plc JCI reported first-quarter fiscal 2025 (ended December 2024) adjusted earnings of 64 cents per share, which beat the Zacks Consensus Estimate of 59 cents. The bottom line increased 39.1% year over year.

Total revenues (continuing operations) of $5.43 billion surpassed the consensus estimate of $5.33 billion. The top line increased 4.2% year over year, whereas organic revenues increased 10%.

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Q1 Segmental Results

Building Solutions North America: Revenues were $2.74 billion, up 10% year over year. Our estimate was $2.69 billion. Organic sales also jumped 10%, driven by the strong performance of applied heating, ventilation and air conditioning (HVAC) and controls businesses.  Adjusted EBITA increased 16% year over year to $332 million.

Building Solutions Europe, Middle East, Africa/Latin America: Revenues totaled $1.07 billion, up 3% year over year. Our estimate was $1.09 billion. Organic sales climbed 6% due to growth in service and fire and security businesses. Adjusted EBITA was $108 million, up 35% year over year.

Building Solutions Asia Pacific: Revenues increased 4% to $527 million. Sales grew 5% organically, driven by growth in service business. Adjusted EBITA was $49 million, up 7% year over year.

Global Products: The segment reported revenues of $1.08 billion, down 8% year over year. Our estimate was $1.1 billion. Organic sales were up 15%, supported by strength in the Applied HVAC business. Adjusted EBITA was $326 million, up 21.6% year over year.

JCI’s Margin Profile

In the fiscal first quarter, Johnson Controls’ cost of sales increased 2% year over year to approximately $3.5 billion. Gross profit increased 8.3% year over year to $1.9 billion and the margin increased 140 basis points (bps) to 35.5%. Selling, general and administrative expenses were $1.4 billion, up 4.9% year over year.

Financial Position

Johnson Controls had cash and cash equivalents of $1.24 billion as of Dec. 31, 2024, compared with $606 million at the end of fiscal 2024 (ended Sept. 30, 2024). Long-term debt was $8.6 billion compared with $8 billion at the end of fiscal 2024.

In the first three months of fiscal 2025, the company generated net cash of $249 million from operating activities against $111 million used in the year-ago period. It reported a free cash flow of $133 million in the same period compared with free cash outflow of $193 million in the year-ago period.

The company repurchased 4.1 million shares for approximately $330 million in the fiscal first quarter.

JCI’s Q2 Guidance

Johnson Controls anticipates mid-single digit organic revenue growth from the year-ago level. Adjusted segment EBITA margin is estimated to be approximately 16.5%. JCI expects adjusted earnings to be in the range of 77-79 cents per share.

FY25 Guidance

Johnson Controls anticipates organic revenue growth to be in the mid-single digit range from the prior-year level. Adjusted segment EBITA margin is expected to improve more than 80 bps from the year-ago actual. JCI expects adjusted earnings to be in the range of $3.50-$3.60 per share.

JCI’s Zacks Rank & Stocks to Consider

JCI currently carries a Zacks Rank #4 (Sell). Here are some better-ranked stocks from the same space:

Enersys ENS currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ENS delivered a trailing four-quarter average earnings surprise of 1.6%. In the past 60 days, the consensus estimate for Enersys’ fiscal 2025 (ending March 2025) earnings has increased 10.4%.

AZZ Inc. AZZ presently carries a Zacks Rank #2 (Buy). AZZ delivered a trailing four-quarter average earnings surprise of 15.2%.

In the past 60 days, the consensus estimate for AZZ’s fiscal 2024 (ending February 2025) earnings has increased 2.1%.

Louisiana-Pacific Corporation LPX currently has a Zacks Rank of 2. LPX delivered a trailing four-quarter average earnings surprise of 30.7%.

In the past 60 days, the consensus estimate for LPX’s 2025 earnings has increased 4.8%.

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