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Johnson Controls International PLC JCI

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Johnson Controls Bounces Back From Fiscal Q3 Lows; We Expect Growth to Return in 2H 2021

Analyst Note

| Brian Bernard, CFA, CPA |

Johnson Controls finished its fiscal 2020 with solid fourth quarter results. While sales declined 5% year over year to approximately $6 billion, fourth quarter revenue was up 11% sequentially. Global products revenue was down 3% year over year but gained 8% sequentially. As was the case with peers Carrier, Lennox, and Trane Technologies, North American residential heating, ventilation, and air-conditioning sales were very robust, increasing 31% year over year. However, we note that Johnson Controls' North American residential HVAC business is much smaller than its competitors'. Field revenue (that is, installation and service revenue) declined about 7% year over year but rebounded 13% sequentially, and monthly orders have been steadily trending higher since May. While management expects fiscal first quarter 2021 organic revenue to decline 5%-7% year over year, we expect Johnson Controls will return to growth during the second half of 2021; the firm will be up against easy prior-year comparisons, and we expect the global economy will be in better shape next year.

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Company Profile

Business Description

Johnson Controls manufactures, installs, and services HVAC systems, building management systems and controls, industrial refrigeration systems, and fire and security solutions. In April 2019, Johnson Controls sold its power solutions (automobile batteries) business for $11.6 billion of net cash proceeds.

One Albert Quay
Cork, T12 X8N6, Ireland
T +353 214235000
Sector Industrials
Industry Engineering & Construction
Most Recent Earnings Sep 30, 2020
Fiscal Year End Sep 30, 2020
Stock Type
Employees 83,000