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Johnson Controls Reports Strong Q2 Results and Boosts FY25 Guidance

Johnson Controls International plc (NYSE: JCI) has unveiled its impressive financial performance for the second quarter of fiscal year 2025. The company's results indicate a continued demand for its building solutions and execution excellence across its operations. During this quarter, Johnson Controls achieved a total sales figure of $5.7 billion, marking a 1% increase compared to the same period last year. Organic sales increased by 7%, demonstrating robust growth across their segments.

Key Financial Highlights

The following are notable financial figures reported for Q2:

• - GAAP Earnings Per Share (EPS): $0.71
• - Adjusted EPS: $0.82
• - Orders Growth: 5% organically year-over-year
• - Total Backlog: $14.0 billion, up 12% organically from last year

These numbers are a testament to Johnson Controls' commitment to delivering innovative and sustainable solutions for various sectors, including healthcare, education, and manufacturing.

Segment Performance

Breaking down the report by segments highlights several important trends:
1. Building Solutions North America
- Sales: $2.9 billion (6% increase)
- Segment EBITA: $390 million (5% increase)
- EBITA Margin: 13.4%

North America continued to benefit from strong demand in Applied HVAC and Controls, along with a healthy backlog.

2. Building Solutions EMEA/LA
- Sales: $1.1 billion (2% increase)
- Segment EBITA: $136 million (53% increase)
- EBITA Margin: 12.5%

Growth was fueled primarily by enhanced service offerings, particularly within HVAC and fire security.

3. Building Solutions Asia Pacific
- Sales: $542 million (10% increase)
- Segment EBITA: $79 million (46% increase)
- EBITA Margin: 14.6%

Noteworthy sales growth was driven by significant increases in both service and systems offerings.

4. Global Products
- Sales: $1.1 billion (13% decrease)
- Segment EBITA: $341 million (18% increase)
- EBITA Margin: 30.1%

Although overall sales decreased, effective pricing strategies led to a significant improvement in margins.

Corporate and Cash Flow Updates

The company reported cash provided by its operating activities totaling $550 million for the quarter, with free cash flow reaching $456 million. Additionally, Johnson Controls returned value to shareholders by paying dividends amounting to $245 million and repurchasing 4.1 million shares of common stock for $330 million.

Revised FY25 Guidance

Following this robust Q2 performance, Johnson Controls has adjusted its full-year guidance for FY25:

• - Organic Sales Growth: Mid-single digits (unchanged)
• - Adjusted EPS Before Special Items: Expected to be around $3.60, an upward revision from the previous estimate of $3.50 to $3.60.
• - Adjusted Segment EBITA Margin Improvement: Approximately 90 basis points year-over-year, upgraded from more than 80 basis points.

This optimistic outlook signifies the company's solidifying position in the market, driven by consistent demand and a resilient operational strategy.

Conclusion

CEO Joakim Weidemanis commented on the results, stating, "The Johnson Controls team delivered strong second quarter results, highlighted by organic sales growth, margin expansion, and record backlog. The outcome reflects our commitment to innovation and efficiency in delivering value for every stakeholder involved." As Johnson Controls continues to capitalize on emerging trends and demands within the building solutions sector, expectations are high for sustained growth and success in the upcoming quarters.

For further details or to access the complete Q2 report, please visit the Johnson Controls Investor Relations website.