On November 6, 2024, Johnson Controls International PLC (JCI, Financial) released its 8-K filing for the fiscal fourth quarter and full year 2024. The company, a leader in smart, healthy, and sustainable building solutions, reported a robust performance with Q4 sales increasing by 7% to $7.4 billion, surpassing the analyst revenue estimate of $7,174.05 million. The adjusted earnings per share (EPS) for the quarter stood at $1.28, exceeding the analyst estimate of $1.18.
Company Overview
Johnson Controls manufactures, installs, and services HVAC systems, building management systems and controls, industrial refrigeration units, and fire and security solutions. Commercial HVAC accounts for over 45% of sales, fire and security represent roughly 40% of sales, and residential HVAC, industrial refrigeration, and other solutions account for the remaining 15% of revenue. In fiscal 2023, Johnson Controls generated nearly $27 billion in revenue.
Performance Highlights and Challenges
Johnson Controls reported a 10% increase in organic sales for Q4, reflecting strong demand across its product lines. The company's backlog reached a record $13.1 billion, up 7% organically year-over-year, indicating sustained demand and future revenue potential. However, the company faces challenges such as unfavorable mix impacts in certain segments and ongoing restructuring costs, which could affect future profitability.
Financial Achievements and Industry Impact
The company's full-year sales increased by 2% to $27.4 billion, with an organic sales growth of 4%. The adjusted EPS for the full year was $3.71, highlighting the company's ability to deliver strong financial results despite market challenges. These achievements are crucial for maintaining competitive advantage in the construction industry, where efficiency and innovation are key drivers of success.
Key Financial Metrics
For Q4, Johnson Controls reported a GAAP net income of $633 million and an adjusted net income of $858 million. The company's free cash flow was $1,318 million, with an adjusted free cash flow of $1,087 million. These metrics underscore the company's strong cash generation capabilities, which are vital for funding growth initiatives and returning value to shareholders.
Segment Performance
| Segment | Q4 2024 Sales (in millions) | Change (%) | Segment EBITA Margin (%) |
|---|---|---|---|
| Building Solutions North America | $3,223 | 16% | 15.0% |
| Building Solutions EMEA/LA | $1,113 | 7% | 11.5% (Adjusted) |
| Building Solutions Asia Pacific | $664 | -5% | 14.2% |
| Global Products | $2,400 | 0% | 28.0% |
Analysis and Outlook
Johnson Controls' strategic focus on portfolio simplification and operational efficiencies has positioned it well for continued growth. The company's strong backlog and organic sales growth indicate a positive outlook for fiscal 2025. However, the ongoing restructuring and potential market volatility remain areas to watch. The company's guidance for fiscal 2025 includes mid-single-digit organic sales growth and adjusted EPS of $3.40 to $3.50, reflecting confidence in its strategic direction.
“We are very pleased with our strong end to the fiscal year and our fourth quarter results, which delivered double-digit organic sales growth and robust margin expansion,” said George Oliver, Chairman and CEO.
Explore the complete 8-K earnings release (here) from Johnson Controls International PLC for further details.
