Johnson Controls, Inc. (NYSE:JCI) Reports Better Than Expected Earnings for Its Third Quarter of FY 2014

Johnson Controls, Inc. (NYSE:JCI) released its earnings reports for the third-quarter of the fiscal year 2014 on July 18, 2014. The earnings of 84 cents for each share exceeded the consensus estimates of Zacks: earnings of 82 cents for each share. If the earnings are compared with the same quarter a year back, an increase of 16.7 can be seen. It is pertinent to note here that the financial reports of past year have been revised since the company no longer deals with Automotive Electronics business.

The net income of Johnson Controls, Inc. (NYSE:JCI) has reached 35 cents each share or in other words $238 million. The company’s revenues have increased by 2.9 percent if compared with year to year figures. This increase in revenues resulted from power Solutions and Automotive Experience sectors of the company. Moreover, the building efficiency business of the company also caused the revenues to go up. However the reported revenue of $10.81 billion still lags behind $10.83 billion, Zacks estimated revenue.

Coming to the sales’ costs, the costs have gone up to $9.2 billion from previously incurred costs of $8.9 billion: an increase of 2.4 percent can be seen on yearly basis. Gross profit margin, however, increased by 6.3 percent and reached the figures of $1.7 billion. Total expenses, including the administrative, selling and general expenses, came to $977 million; the figures are aligned with last year’s figures. The company’s quarterly income reached $794 million; an increase of 15.1 percent can be seen when compared with the $690 million figures of the same quarter a year back.

The revenues from automotive production increased by 6.9 percent, on year to year basis, and reached the figures of $5.7 billion. Johnson Controls, Inc. (NYSE:JCI)’s quarterly income was recorded to be $241 million; however, the figures soared to $295 million after adjustments.

The company’s revenues of the Business Efficiency sector came down to $3.6 billion, due to a shortage in demand in the areas of Latin America, North America and Middle East. A decrease of 3.7 percent can be seen in the revenue figures, on yearly basis as the company received 8 percent fewer orders this year when compared with the orders received last year.

Power Solutions’ revenues reached to $1.5 billion. Last year, the company gained revenues of $1.4 billion from this production sector of the company; an increase of 5.7 percent can be noted, on year to year base.

Johnson Controls, Inc. (NYSE:JCI) total debt reached to the figures of $7.5 billion and its debt to capitalization ratio is recorded to be 38.8 percent. The company had a debt of $6 billion last year whereas its debt to capitalization ratio was 33.1 percent by the end of June 30, 2013. The company has a cash flow of $1.2 billion whereas its operating cash flow for the last fiscal year was $1.5 billion. Nonetheless, the good news is that the capital expenditures of the company came down to $876 million, from previously incurred expenditure of $929 million.