Johnson Controls Surpasses Q2 Revenue And Earnings Estimates, Raises EPS Guidance For 2025

Johnson Controls International plc JCI shares traded lower in premarket on Wednesday after the company reported second-quarter sales growth of 1.4% year over year to $5.676 billion, beating the consensus estimate of $5.63 billion.

Adjusted EPS of 82 cents up from 69 cents YoY, beat the consensus estimate of 59 cents.

Gross profit for the quarter rose 7.6% to $2.07 billion with a gross margin of 36.5%, up 210 bps YoY. Selling, general, and administrative expenses declined 30.9% to $1.43 billion.

Related: Johnson Controls Gears Up For Q2 Print; Here Are The Recent Forecast Changes From Wall Street’s Most Accurate Analysts

Segment Results:

• Building Solutions North America: Sales rose 6% to $2.9 billion, with organic sales up 7%, driven by strong Applied HVAC and Controls. Orders grew 4%, backlog rose 11%, while segment EBITA margin dipped slightly to 13.4% as Systems outpaced Service.
• Building Solutions EMEA/LA: Sales rose 2% to $1.1 billion, with organic sales up 5%, led by strong Service and Applied HVAC growth. Orders and backlog both increased 10%, while the segment EBITA margin expanded by 410 basis points to 12.5% on productivity gains and a favorable mix.
• Building Solutions Asia Pacific: Sales rose 10% to $542 million, with organic sales up 13% on double-digit Service and Systems growth. The backlog grew 21% to $1.5 billion, while the segment EBITA margin improved by 360 basis points to 14.6% on productivity gains.
• Global Products: Sales fell 13% to $1.1 billion, but organic sales rose 8%, driven by strong Applied HVAC growth and higher prices. Segment EBITA margin expanded 780 basis points to 30.1% thanks to operational efficiencies and volume gains, excluding divestiture impacts.

Income from continuing operations stood at $475 million, compared to a loss of $318 million a year ago, and the operating margin was 8.4%.

Cash provided by operating activities from continuing operations for the quarter was $550 million, and the free cash flow was $456 million.

Johnson held $795 million in cash and equivalents as of March 31, 2025.

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Third-quarter Outlook: Johnson Controls sees third-quarter adjusted EPS of $0.97 – $1.00 against an estimate of $1.00. The company sees organic sales growth of mid-single digits.

JCI expects an Adjusted segment EBITA margin of ~17.5% for the third quarter.

2025 Outlook: The company raised the FY25 adjusted EPS outlook from $3.50-$3.60 to $3.60 (versus consensus $3.60), with an unchanged outlook for organic sales growth of mid-single digits.

JCI expects an Adjusted segment EBITA margin improvement of ~90 basis points year-over-year (previously more than 80 basis points).

Price Action: At the last check on Wednesday, JCI shares were trading lower by 0.75% at $88.14 in the premarket.

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