Johnson Controls beats fourth-quarter expectations and sets fiscal 2027 profit range of $6.15 to $6.30

Revenue of $7.11 billion was in line with expectations, and the company expects organic sales growth of 11 to 12 per cent for the full year.

Johnson Controls said on Tuesday that fourth-quarter earnings per share came in at $1.66, which is $0.06 above expectations. Earnings per share is the profit attributed to each share. Revenue was $7.11 billion, against $7.10 billion expected, so the earnings beat did most of the work in the quarter.

For the first quarter of fiscal 2027, the company expects organic sales growth of 12 to 14 per cent. Organic sales growth is the company's own measure of sales growth. It expects operating leverage, a measure of how fast profit rises relative to sales, of 30 to 35 per cent. It also expects adjusted earnings per share of $1.15 to $1.20.

For the full fiscal year, the company expects organic sales growth of 11 to 12 per cent, operating leverage of at least 30 per cent, and adjusted earnings per share of $6.15 to $6.30. It expects to turn about 95 per cent of its adjusted profit into free cash flow, the cash left after spending on the business. Johnson Controls paid $242 million in dividends during the quarter.

Chief Executive Officer Joakim Weidemanis said that sales growth, along with productivity and simplification improvements, drove margin expansion across all three segments. He cited record backlog, orders not yet filled, as support for confidence entering fiscal 2027.

The margin expansion in all three segments is the base that the fiscal 2027 range of $6.15 to $6.30 has to build on. The company's record backlog is its main support for full-year organic growth of 11 to 12 per cent, and quarterly revenue will test that claim. The first-quarter forecast of 12 to 14 per cent sits above the full-year range, so the next report will show whether the faster early pace holds.