{"id":485033,"date":"2021-04-30T06:58:19","date_gmt":"2021-04-30T10:58:19","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/johnson-controls-reports-solid-second-quarter-results-and-once-again-raises-full-year-guidance-announces-250-million-in-new-annual-run-rate-cogs-savings-by-fiscal-2023\/"},"modified":"2021-04-30T06:58:19","modified_gmt":"2021-04-30T10:58:19","slug":"johnson-controls-reports-solid-second-quarter-results-and-once-again-raises-full-year-guidance-announces-250-million-in-new-annual-run-rate-cogs-savings-by-fiscal-2023","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/johnson-controls-reports-solid-second-quarter-results-and-once-again-raises-full-year-guidance-announces-250-million-in-new-annual-run-rate-cogs-savings-by-fiscal-2023\/","title":{"rendered":"Johnson Controls reports solid second quarter results and once again raises full-year guidance; Announces $250 million in new annual run rate COGS savings by fiscal 2023"},"content":{"rendered":"
\n

– GAAP EPS of $0.48; Adjusted EPS of $0.52, up 24% versus prior year<\/h2>\n

– Sales and order growth inflected positive on both a nominal and organic basis; Backlog of $9.6 billion increases 4% organically year-over-year<\/h2>\n

– Cash provided by operating activities was $0.6 billion; Free cash flow of $0.5 billion<\/h2>\n

– Announces COGS cost actions to drive $250 million in annual run rate savings by fiscal 2023<\/h2>\n

– Provides fiscal 2021 third quarter adjusted earnings per share guidance range of $0.80 to $0.82<\/h2>\n

– Raises fiscal 2021 adjusted EPS guidance to $2.58 to $2.65, an increase of 15% to 18% year-over-year<\/h2>\n

PR Newswire<\/p>\n<\/p><\/div>\n

\n

\n CORK, Ireland<\/span>, April 30, 2021<\/span> \/PRNewswire\/ — Johnson Controls International plc (NYSE: JCI), the global leader for smart, healthy and sustainable buildings, today reported fiscal second quarter 2021 GAAP earnings per share (“EPS”) from continuing operations, including special items, of $0.48<\/span>. Excluding these items, adjusted EPS from continuing operations was $0.52<\/span>, up 24% versus the prior year period (see attached footnotes for non-GAAP reconciliation). <\/p>\n

Our performance continues to strengthen…with a sharpened focus on our future. — Johnson Controls CEO George Oliver<\/span><\/div>\n

Sales of $5.6 billion<\/span> increased 3% compared to the prior year on a reported basis, and up 1% organically. GAAP net income from continuing operations was $343 million<\/span>. Adjusted net income from continuing operations of $373 million<\/span>, increased 18% versus the prior year. Earnings before interest and taxes (“EBIT”) was $650 million<\/span> and EBIT margin was 11.6%. Adjusted EBIT was $537 million<\/span> and adjusted EBIT margin was 9.6%, an increase of 150 basis points versus prior year results.<\/p>\n

“Our performance continues to strengthen as we emerge from the global pandemic with a sharpened focus on our future,” said chairman and CEO, George Oliver<\/span>. “I am incredibly proud of our employees’ leadership and commitment through this time. The strategic actions we have taken to address future profitability, expand into key growth markets through disciplined capital allocation, deliver on sustainability, and expand our digital and service offerings, are all evidence of how we are executing our strategy,” Oliver continued. <\/p>\n

“Momentum in many of our end markets continues to build. Volumes in our Global Products business are recovering nicely, led by continued strength in Residential, while order activity in our non-residential businesses is accelerating and the pipeline is expanding further as we enter the second half of our year. Based on our year-to-date performance, the strength and resilience of our backlog, and the outlook for the remainder of the year, I am confident we are positioned to deliver on all of our commitments.” \u00a0\u00a0\u00a0<\/p>\n

\n Cost Savings Program<\/b>\n <\/p>\n

In addition to the multi-year SG&A actions designed to further optimize the overall cost structure and enhance operational efficiency that was announced in February, the company announced this morning the details of its multi-year Cost of Goods Sold (COGS) actions which are expected to deliver annualized net savings of $250 million<\/span>. Together, these cost savings programs are expected to deliver a net $550 million<\/span> in annualized net savings by fiscal year-end 2023. Additional details related to the COGS actions are included in the slide presentation. <\/p>\n

\n Income and EPS amounts attributable to Johnson Controls ordinary shareholders
<\/b>
\n ($ millions, except per-share amounts) <\/b>\n <\/p>\n

The financial highlights presented in the tables below are in accordance with GAAP, unless otherwise indicated. All comparisons are to the second fiscal quarter of 2020. <\/p>\n

Organic sales, total segment EBITA, adjusted segment EBITA, adjusted corporate expense, EBIT, adjusted EBIT, adjusted net income from continuing operations, adjusted EPS from continuing operations and free cash flow are non-GAAP financial measures. For a reconciliation of these non-GAAP measures and detail of the special items, refer to the attached footnotes. A slide presentation to accompany the results can be found in the Investor Relations section of Johnson Controls’ website at http:\/\/investors.johnsoncontrols.com<\/a>.<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n
\n \n <\/td>\n\n

\n
\n Fiscal Q2<\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n \n <\/td>\n\n

\n
\n GAAP<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n Adjusted<\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n \n <\/td>\n\n

\n
\n
\n 2020<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n
\n 2021<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n
\n 2020<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n
\n 2021<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n Sales<\/span>\n <\/p>\n<\/td>\n

\n

\n $5,444<\/span>\n <\/p>\n<\/td>\n

\n

\n $5,594<\/span>\n <\/p>\n<\/td>\n

\n

\n $5,444<\/span>\n <\/p>\n<\/td>\n

\n

\n $5,594<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n Segment EBITA<\/span>\n <\/p>\n<\/td>\n

\n

\n 617<\/span>\n <\/p>\n<\/td>\n

\n

\n 711<\/span>\n <\/p>\n<\/td>\n

\n

\n 619<\/span>\n <\/p>\n<\/td>\n

\n

\n 711<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n EBIT<\/span>\n <\/p>\n<\/td>\n

\n

\n 308<\/span>\n <\/p>\n<\/td>\n

\n

\n 650<\/span>\n <\/p>\n<\/td>\n

\n

\n 440<\/span>\n <\/p>\n<\/td>\n

\n

\n 537<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n Net income from continuing operations<\/span>\n <\/p>\n<\/td>\n

\n

\n 213<\/span>\n <\/p>\n<\/td>\n

\n

\n 343<\/span>\n <\/p>\n<\/td>\n

\n

\n 317<\/span>\n <\/p>\n<\/td>\n

\n

\n 373<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n \n <\/td>\n\n \n <\/td>\n\n \n <\/td>\n\n \n <\/td>\n\n \n <\/td>\n<\/tr>\n
\n

\n Diluted EPS from continuing operations<\/span>\n <\/p>\n<\/td>\n

\n

\n $0.28<\/span>\n <\/p>\n<\/td>\n

\n

\n $0.48<\/span>\n <\/p>\n<\/td>\n

\n

\n $0.42<\/span>\n <\/p>\n<\/td>\n

\n

\n $0.52<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n \n <\/td>\n\n \n <\/td>\n\n \n <\/td>\n\n \n <\/td>\n\n \n <\/td>\n<\/tr>\n<\/table><\/div>\n

\n SEGMENT RESULTS<\/b>\n <\/p>\n

\n Building Solutions North America <\/b>\n <\/p>\n

\n\n\n\n\n\n\n\n
\n \n <\/td>\n\n

\n
\n Fiscal Q2<\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n \n <\/td>\n\n

\n
\n GAAP<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n Adjusted<\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n \n <\/td>\n\n

\n
\n
\n 2020<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n
\n 2021<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n
\n 2020<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n
\n 2021<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n Sales<\/span>\n <\/p>\n<\/td>\n

\n

\n $2,175<\/span>\n <\/p>\n<\/td>\n

\n

\n $2,092<\/span>\n <\/p>\n<\/td>\n

\n

\n $2,175<\/span>\n <\/p>\n<\/td>\n

\n

\n $2,092<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n Segment EBITA<\/span>\n <\/p>\n<\/td>\n

\n

\n 251<\/span>\n <\/p>\n<\/td>\n

\n

\n 266<\/span>\n <\/p>\n<\/td>\n

\n

\n 253<\/span>\n <\/p>\n<\/td>\n

\n

\n 266<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n Segment EBITA Margin %<\/span>\n <\/p>\n<\/td>\n

\n

\n 11.5%<\/span>\n <\/p>\n<\/td>\n

\n

\n 12.7%<\/span>\n <\/p>\n<\/td>\n

\n

\n 11.6%<\/span>\n <\/p>\n<\/td>\n

\n

\n 12.7%<\/span>\n <\/p>\n<\/td>\n<\/tr>\n<\/table><\/div>\n

Sales in the quarter of $2.1 billion<\/span> decreased 4% versus the prior year. Organic sales also declined 4% versus the prior year, driven by continued weakness in project installations due primarily to the slower order intake experienced throughout much of the pandemic. Strong growth in Performance Solutions resulting from increased demand for our energy savings performance contract business, was more than offset by a decline in Fire & Security and Applied HVAC & Controls. \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/p>\n

Orders in the quarter, excluding M&A and adjusted for foreign currency, increased 5% year-over-year. Backlog at the end of the quarter of $6.0 billion<\/span> increased 3% compared to the prior year, excluding M&A and adjusted for foreign currency.<\/p>\n

Adjusted segment EBITA was $266 million<\/span>, up 5% versus the prior year. Adjusted segment EBITA margin of 12.7% expanded 110 basis points versus the prior year driven by significant cost mitigation actions and restructuring benefits as well as positive mix, which more than offset the impact of the volume decline.\u00a0 <\/p>\n

\n Building Solutions EMEA\/LA <\/b>(Europe<\/span>, Middle East<\/span>, Africa<\/span>\/Latin America<\/span>)<\/p>\n

\n\n\n\n\n\n\n\n
\n \n <\/td>\n\n

\n
\n Fiscal Q2<\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n \n <\/td>\n\n

\n
\n GAAP<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n Adjusted<\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n \n <\/td>\n\n

\n
\n
\n 2020<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n
\n 2021<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n
\n 2020<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n
\n 2021<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n Sales<\/span>\n <\/p>\n<\/td>\n

\n

\n $850<\/span>\n <\/p>\n<\/td>\n

\n

\n $897<\/span>\n <\/p>\n<\/td>\n

\n

\n $850<\/span>\n <\/p>\n<\/td>\n

\n

\n $897<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n Segment EBITA<\/span>\n <\/p>\n<\/td>\n

\n

\n 85<\/span>\n <\/p>\n<\/td>\n

\n

\n 86<\/span>\n <\/p>\n<\/td>\n

\n

\n 85<\/span>\n <\/p>\n<\/td>\n

\n

\n 86<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n Segment EBITA Margin %<\/span>\n <\/p>\n<\/td>\n

\n

\n 10.0%<\/span>\n <\/p>\n<\/td>\n

\n

\n 9.6%<\/span>\n <\/p>\n<\/td>\n

\n

\n 10.0%<\/span>\n <\/p>\n<\/td>\n

\n

\n 9.6%<\/span>\n <\/p>\n<\/td>\n<\/tr>\n<\/table><\/div>\n

Sales in the quarter of $897 million<\/span> increased 6% versus the prior year. Organic sales were flat with the prior year as a modest increase in project installations was offset by a modest decline in service.\u00a0 Strength in our Industrial Refrigeration and Applied HVAC & Controls businesses was offset by a low-single digit decline in Fire & Security. Modest growth in Europe<\/span>, despite continued headwinds related to the pandemic, was offset by declines in the Middle East<\/span> and Latin America.\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/p>\n

Orders in the quarter, excluding M&A and adjusted for foreign currency, increased 5% year-over-year. Backlog at the end of the quarter of $1.9 billion<\/span> increased 7% year-over-year, excluding M&A and adjusted for foreign currency.<\/p>\n

Adjusted segment EBITA was $86 million<\/span>, up 1% versus the prior year. Adjusted segment EBITA margin of 9.6% declined 40 basis points over the prior year, including a 40 basis point headwind related to foreign currency. Adjusting for foreign currency, EMEALA’s underlying EBITA margin was flat with the prior year, as the benefit of mitigating cost actions was offset by lower equity income.\u00a0 <\/p>\n

\n Building Solutions Asia Pacific <\/b>\n <\/p>\n

\n\n\n\n\n\n\n\n
\n \n <\/td>\n\n

\n
\n Fiscal Q2<\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n \n <\/td>\n\n

\n
\n GAAP<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n Adjusted<\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n \n <\/td>\n\n

\n
\n
\n 2020<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n
\n 2021<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n
\n 2020<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n
\n 2021<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n Sales<\/span>\n <\/p>\n<\/td>\n

\n

\n $525<\/span>\n <\/p>\n<\/td>\n

\n

\n $603<\/span>\n <\/p>\n<\/td>\n

\n

\n $525<\/span>\n <\/p>\n<\/td>\n

\n

\n $603<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n Segment EBITA<\/span>\n <\/p>\n<\/td>\n

\n

\n 65<\/span>\n <\/p>\n<\/td>\n

\n

\n 74<\/span>\n <\/p>\n<\/td>\n

\n

\n 65<\/span>\n <\/p>\n<\/td>\n

\n

\n 74<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n Segment EBITA Margin %<\/span>\n <\/p>\n<\/td>\n

\n

\n 12.4%<\/span>\n <\/p>\n<\/td>\n

\n

\n 12.3%<\/span>\n <\/p>\n<\/td>\n

\n

\n 12.4%<\/span>\n <\/p>\n<\/td>\n

\n

\n 12.3%<\/span>\n <\/p>\n<\/td>\n<\/tr>\n<\/table><\/div>\n

Sales in the quarter of $603 million<\/span> increased 15% versus the prior year. Organic sales grew 9% versus the prior year with growth in both service and project installations, driven by strong growth in Applied HVAC & Controls. China<\/span> continues to recover sharply, with the rest of Asia<\/span> still mixed.\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0<\/p>\n

Orders in the quarter, excluding M&A and adjusted for foreign currency, declined 1% year-over-year.\u00a0 Significantly improved demand in China<\/span> was offset by further declines in countries such as Japan<\/span>, Korea and South East Asia<\/span>. Backlog at the end of the quarter of $1.7 billion<\/span> increased 4% year-over-year, excluding M&A and adjusted for foreign currency.<\/p>\n

Adjusted segment EBITA was $74 million<\/span>, up 14% versus the prior year. Adjusted segment EBITA margin of 12.3% declined 10 basis points versus the prior year including a 20 basis point headwind related to foreign currency and a divestiture.\u00a0 Adjusting for this, Asia Pacific’s<\/span> underlying EBITA margin increased 10 basis points as the benefit of volume leverage was mostly offset by geographic mix.\u00a0 \u00a0\u00a0<\/p>\n

\n Global Products<\/b>\n <\/p>\n

\n\n\n\n\n\n\n\n
\n \n <\/td>\n\n

\n
\n Fiscal Q2<\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n \n <\/td>\n\n

\n
\n GAAP<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n Adjusted<\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n \n <\/td>\n\n

\n
\n
\n 2020<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n
\n 2021<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n
\n 2020<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n
\n 2021<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n Sales<\/span>\n <\/p>\n<\/td>\n

\n

\n $1,894<\/span>\n <\/p>\n<\/td>\n

\n

\n $2,002<\/span>\n <\/p>\n<\/td>\n

\n

\n $1,894<\/span>\n <\/p>\n<\/td>\n

\n

\n $2,002<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n Segment EBITA<\/span>\n <\/p>\n<\/td>\n

\n

\n 216<\/span>\n <\/p>\n<\/td>\n

\n

\n 285<\/span>\n <\/p>\n<\/td>\n

\n

\n 216<\/span>\n <\/p>\n<\/td>\n

\n

\n 285<\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n Segment EBITA Margin %<\/span>\n <\/p>\n<\/td>\n

\n

\n 11.4%<\/span>\n <\/p>\n<\/td>\n

\n

\n 14.2%<\/span>\n <\/p>\n<\/td>\n

\n

\n 11.4%<\/span>\n <\/p>\n<\/td>\n

\n

\n 14.2%<\/span>\n <\/p>\n<\/td>\n<\/tr>\n<\/table><\/div>\n

Sales in the quarter of $2.0 billion<\/span> increased 6% versus the prior year. Organic sales also grew 6% versus the prior year driven by growth in Residential HVAC and to a lesser extent Fire & Security. This growth was partially offset by a moderating decline in Commercial HVAC and Industrial Refrigeration.\u00a0 <\/p>\n

Adjusted segment EBITA was $285 million<\/span>, up 32% versus the prior year. Adjusted segment EBITA margin of 14.2% expanded 280 basis points versus the prior year driven by volume leverage, increased equity income, the benefit of mitigating cost actions, and positive price\/cost partially offset by negative mix.\u00a0 <\/p>\n

\n Corporate<\/b>\n <\/p>\n

\n\n\n\n\n\n
\n \n <\/td>\n\n

\n
\n Fiscal Q2<\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n \n <\/td>\n\n

\n
\n GAAP<\/b>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n Adjusted<\/b>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n \n <\/td>\n\n

\n
\n
\n 2020<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n
\n 2021<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n
\n 2020<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n

\n

\n
\n
\n 2021<\/b>
\n <\/u>
\n <\/span>\n <\/p>\n<\/td>\n<\/tr>\n

\n

\n Corporate Expense<\/span>\n <\/p>\n<\/td>\n

\n

\n ($118)<\/span>\n <\/p>\n<\/td>\n

\n

\n ($70)<\/span>\n <\/p>\n<\/td>\n

\n

\n ($82)<\/span>\n <\/p>\n<\/td>\n

\n

\n ($70)<\/span>\n <\/p>\n<\/td>\n<\/tr>\n<\/table><\/div>\n

Adjusted Corporate expense was $70 million<\/span> in the quarter, a decrease of 15% compared to the prior year, driven primarily by mitigating cost actions and continuous structural cost reductions.<\/p>\n

\n OTHER ITEMS<\/b>\n <\/p>\n