Johnson Controls International plc JCI reported fourth-quarter fiscal 2026 (ended September 2026) adjusted earnings of $1.66 per share, which beat the Zacks Consensus Estimate of $1.58. The bottom line increased 31.7% year over year, driven by higher revenues, favorable business mix and productivity improvements.
Total revenues (continuing operations) of $7.11 billion surpassed the consensus estimate of $6.97 billion in the quarter. The top line increased 10.4% year over year, whereas organic revenues increased 12%, driven by strength in applied heating, ventilation and air conditioning (HVAC) and controls. Orders grew 44% organically, while backlog increased 43% to a record $23 billion, supported by sustained demand for data center solutions.
JCI's Q4 Segmental Performance
The company reports under three segments, namely Americas, EMEA and APAC.
Americas: Revenues totaled $4.93 billion, up 14% year over year. Organic sales also increased 14%, driven by solid momentum in applied HVAC and controls. Products and systems sales were up 16% organically, while services grew 10%.
Adjusted segment EBITA increased 26% year over year to $1.09 billion. Adjusted EBITA margin expanded 210 basis points (bps) to 22%, supported by higher revenues and favorable business mix. Orders increased 58% organically, while backlog grew 54% to $17.8 billion, driven by data center demand.
EMEA: Revenues were $1.31 billion, down 2% year over year. Organic revenues increased 3%, with products and systems sales remaining flat and services growing 6%. Regional performance continued to face pressure from conflicts in the Middle East.
Adjusted segment EBITA increased 3% to $215 million. Adjusted EBITA margin expanded 80 bps to 16.4%, primarily driven by favorable pricing and productivity improvements, partially offset by divestitures. Orders increased 12% organically, while backlog rose 18% to $3.1 billion.
APAC: Revenues increased 12% year over year to $871 million. Organic sales grew 13%, supported by products and systems’ growth of 15% and applied HVAC strength.
Adjusted segment EBITA increased 19% to $165 million. Adjusted EBITA margin expanded 110 bps to 18.9%, benefiting from higher revenues and productivity improvements. Orders increased 11% organically, while backlog rose 12% to $2.1 billion.
Johnson Controls International plc Price, Consensus and EPS Surprise
Johnson Controls International plc price-consensus-eps-surprise-chart | Johnson Controls International plc Quote
Johnson Controls' Margin Profile
In the fiscal fourth quarter, Johnson Controls' cost of sales increased 7.7% year over year to $4.41 billion. Gross profit increased 15.1% to $2.71 billion, while gross margin expanded 150 bps to 38%.
Selling, general and administrative expenses declined 2.6% to $1.48 billion. Adjusted EBIT increased 31% to $1.30 billion, while adjusted EBIT margin expanded 300 bps to 18.3%. The improvement reflected higher sales, favorable mix and ongoing productivity initiatives.
JCI's Financial Position
Johnson Controls had cash and cash equivalents of $618 million as of Sept. 30, 2026, compared with $379 million at the end of fiscal 2025. Long-term debt declined to $7.53 billion from $8.59 billion over the same period.
In fiscal 2026, cash provided by operating activities from continuing operations totaled $3.87 billion compared with $2.55 billion in the prior year. Adjusted free cash flow increased to $3.23 billion from $2.50 billion, with adjusted free cash flow conversion reaching 103%.
Johnson Controls' Shareholder Returns and Investments
Johnson Controls repurchased shares worth $1.51 billion and paid dividends of $976 million during fiscal 2026. Net debt declined to $8.66 billion at fiscal year-end, while the net debt-to-adjusted EBITDA ratio improved to 1.8 from 2.4 a year earlier.
The company plans approximately $900 million in capital expenditures for fiscal 2027 to expand manufacturing capacity and support customer demand. It also anticipates $400 million in restructuring-related expenses over fiscal 2027 and 2028, targeting a $600-million gross savings run rate by fiscal 2029.
JCI's Q1 Fiscal 2027 Guidance
Johnson Controls anticipates organic revenue growth of 12-14% in the first quarter of fiscal 2027. Operating leverage is expected to be 30-35%.
The company expects adjusted earnings per share in the range of $1.15-$1.20 for the quarter.
Johnson Controls' FY27 Guidance
For fiscal 2027, Johnson Controls anticipates organic revenue growth of 11-12%, supported by sustained demand across mission-critical markets and an expanding order backlog.
Operating leverage is projected to exceed 30%. The company expects adjusted earnings per share of $6.15-$6.30 and adjusted free cash flow conversion of approximately 95%.
Zacks Rank & Other Key Picks
The company currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks from the same space are discussed below.
Emerson Electric Co. EMR currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
EMR delivered a trailing four-quarter average earnings surprise of 1.3%. In the past 60 days, the Zacks Consensus Estimate for Emerson’s fiscal 2026 (ended September 2026) earnings has increased 0.2%.
Gates Industrial GTES presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 6.2%. The Zacks Consensus Estimate for GTES’ 2026 earnings has increased 1.8% in the past 60 days.
Trex Company, Inc. TREX presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 125.9%. In the past 60 days, the consensus estimate for TREX’s 2026 earnings has increased 0.6%.
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Johnson Controls International plc (JCI): Free Stock Analysis Report
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