Insights

Why Shares of Johnson Controls Are Falling Today

What happened
Beating analysts’ top- and bottom-line estimates, Johnson Controls (NYSE: JCI) reported second-quarter 2022 earnings before the market opened this morning. There were several bright spots in the building-automation specialist’s report, yet investors seem to be focused more on management’s forecast for the coming months — not on the company’s recent accomplishments.
As of 10:54 a.m. ET on Wednesday, shares of Johnson Controls were down 12.7%.
So what
Generating revenue of $6.1 billion and adjusted earnings per share (EPS) of $0.63, Johnson Controls surpassed analysts’ expectations for sales and adjusted EPS of $5.9 billion and $0.60, respectively.
Image source: Getty Images.

While there was apparently a lot to celebrate in the earnings report, investors are focusing on the company’s downwardly revised forecast for 2022. In its first-quarter 2022 earnings report, Johnson Controls had reaffirmed it would generate 2022 adjusted EPS of $3.22 to $3.32, representing a year-over-year increase of 22% to 25%. But due to a variety of headwinds (such as supply chain challenges and lockdowns in China), the company now believes that growth for the remainder of 2022 will be less robust than it had originally thought. Management now forecasts adjusted EPS of $2.95 to $3.05, a year-over-year gain of 11% to 15%. 
Now what
Sure, a more-dour outlook on the remainder of 2022 is not what investors hoped to see from the company this morning, but it seems like the market is overreacting to the news instead of recognizing the more-auspicious figures such as the company’s backlog.
Johnson Controls reported that its backlog has reached a company-record $10.9 billion. Headwinds could result in lower profitability for 2022, but a $10.9 billion backlog bodes well for the company’s future, something that long-term investors should place greater emphasis on than a lower 2022 adjusted EPS forecast.
Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. –

What happened

Beating analysts’ top- and bottom-line estimates, Johnson Controls (NYSE: JCI) reported second-quarter 2022 earnings before the market opened this morning. There were several bright spots in the building-automation specialist’s report, yet investors seem to be focused more on management’s forecast for the coming months — not on the company’s recent accomplishments.

As of 10:54 a.m. ET on Wednesday, shares of Johnson Controls were down 12.7%.

So what

Generating revenue of $6.1 billion and adjusted earnings per share (EPS) of $0.63, Johnson Controls surpassed analysts’ expectations for sales and adjusted EPS of $5.9 billion and $0.60, respectively.

Image source: Getty Images.

While there was apparently a lot to celebrate in the earnings report, investors are focusing on the company’s downwardly revised forecast for 2022. In its first-quarter 2022 earnings report, Johnson Controls had reaffirmed it would generate 2022 adjusted EPS of $3.22 to $3.32, representing a year-over-year increase of 22% to 25%. But due to a variety of headwinds (such as supply chain challenges and lockdowns in China), the company now believes that growth for the remainder of 2022 will be less robust than it had originally thought. Management now forecasts adjusted EPS of $2.95 to $3.05, a year-over-year gain of 11% to 15%. 

Now what

Sure, a more-dour outlook on the remainder of 2022 is not what investors hoped to see from the company this morning, but it seems like the market is overreacting to the news instead of recognizing the more-auspicious figures such as the company’s backlog.

Johnson Controls reported that its backlog has reached a company-record $10.9 billion. Headwinds could result in lower profitability for 2022, but a $10.9 billion backlog bodes well for the company’s future, something that long-term investors should place greater emphasis on than a lower 2022 adjusted EPS forecast.

Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US & HK* Trades. Click Here!