Johnson Controls Beats on EPS But GAAP Results Lag

Seth Jayson, The Motley Fool
Updated

Johnson Controls (NYS: JCI) filed its 10-K on Nov. 19. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended Sep. 30 (Q4), Johnson Controls missed estimates on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped and GAAP earnings per share contracted significantly.


Gross margins grew, operating margins shrank, net margins shrank.

Revenue details
 Johnson Controls logged revenue of $10.39 billion. The 21 analysts polled by S&P Capital IQ predicted sales of $10.86 billion on the same basis. GAAP reported sales were 3.7% lower than the prior-year quarter's $10.79 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at $0.77. The 25 earnings estimates compiled by S&P Capital IQ averaged $0.75 per share. GAAP EPS of $0.05 for Q4 were 90% lower than the prior-year quarter's $0.48 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 15.4%, 40 basis points better than the prior-year quarter. Operating margin was 2.7%, 120 basis points worse than the prior-year quarter. Net margin was 0.3%, 270 basis points worse than the prior-year quarter.

Looking ahead
 Next quarter's average estimate for revenue is $10.10 billion. On the bottom line, the average EPS estimate is $0.51.

Next year's average estimate for revenue is $42.27 billion. The average EPS estimate is $2.60.

Investor sentiment
 The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,211 members out of 1,273 rating the stock outperform, and 62 members rating it underperform. Among 278 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 268 give Johnson Controls a green thumbs-up, and 10 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Johnson Controls is outperform, with an average price target of $33.42.

If you're looking for an edge in the transportation segment of the market, consider strong, smaller brands that sell their products to folks like you and me. We've got a couple to offer, plus a home-owner's trusted go-to company, in our new special report, "Middle-Class Millionaire-Makers: 3 Stocks Wall Street's Too Rich to Notice." Click here for instant access to this free report.

The article Johnson Controls Beats on EPS But GAAP Results Lag originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Originally published