Johnson Controls Misses Q1 Earnings And Revenues

Johnson Controls Inc. (JCI – Analyst Report) is a supplier of automotive interiors, batteries, and other control equipment. The company is gaining from its market expansion in China. It anticipates significant growth opportunities in China. In addition, Johnson Controls will benefit from the acquisitions and mergers that it undertakes to provide customers with world-class technologies through strong complementary brands and channels.

However, the divestiture of several businesses has been weighing on the Johnson Controls’ revenues and profits. Johnson Controls also faces strong competition from major domestic and international manufacturers and distributors of lead-acid batteries, particularly in North America, Europe and Asia. Moreover, Original Equipment manufacturers (OEMs) are continuously pressurizing suppliers such as Johnson Controls to reduce prices. If the company is unable to offset the pricing reductions through improved operating efficiencies and reduced expenditures, it will adversely affect the results. Due to this, investors are eagerly awaiting Johnson Controls’ earnings report.

Estimate Trend & Surprise History

Investors should note that the first-quarter (ended Dec 31, 2015) earnings estimate for Johnson Controls has increased over the past month.
 
Johnson Controls has delivered a flurry of positive earnings surprises. It has beaten the Zacks Consensus Estimate in 3 of the trailing 4 quarters with a positive average beat of 2.08%.

Earnings: Johnson Controls delivered adjusted earnings per share of 82 cents in the first quarter of fiscal 2016, missing the Zacks Consensus Estimate of 83 cents.

Revenues: Johnson Controls reported revenues of $8.93 billion, down 7.2% year over year. Revenues also missed the Zacks Consensus Estimate of $9.43 billion.

Key Stats/Developments to Note: Johnson Controls expects earnings per share in the second quarter of fiscal 2016 to be in the range of 80 cents to 83 cents. For fiscal 2016, Johnson Controls reaffirmed its earnings per share guidance in the band of $3.70–$3.90.