Johnson Controls International PLC JCI

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.