Shares of HVAC equipment and building technology company Johnson Controls (NYSE:JCI) declined after it reported results for its fiscal third quarter of 2023. Its performance was broadly in-line with Wall Street estimates, but peers have delivered mostly better than expected results over the same period, and its performance was viewed as a disappointment in comparison.
Johnson Controls reported in-line third quarter EPS of $1.03, up 21% vs the prior year. Third quarter sales were $7.13 billion, up 8% from last year, but slightly below consensus of $7.2B.
Johnson Controls said it sees EPS of $1.10 for its fourth quarter and $3.55 for the full year, representing about 18% growth. The full year forecast was slightly below consensus estimates but about in-line compared to its prior guidance.
Shares of Johnson Controls declined by 9% after the results were published.
Commenting on the stock, JPMorgan analysts said, “We understand a negative gut reaction, and there should be some give back today in the context of what should be JCI’s time to shine versus others with more mixed end markets, and weak [free cash flow] which will remain a “show me”, but we think downside should be tempered…it doesn’t look expensive, but we think the discount is justified by days like today.”
RBC Capital Markets analysts also commented, saying, “JCI has outperformed peers by 120 bps over the past three weeks and shares are trading below the midpoint of its historical relative P/E range, suggesting to us that expectations may have been low heading into the print. Given the mostly as expected performance in F3Q23 and guidance that was mostly in-line among Multi-Industry peers that have mostly beat and raised, we suspect there could be some modest pressure in the stock today.”