Johnson Controls Issues Q3 Outlook; Cuts FY22 Adj. EPS View Below Market - Update

While reporting weak profit and higher revenues in its second quarter on Wednesday, Johnson Controls Intl plc (JCI) issued third-quarter outlook, and trimmed fiscal 2022 view.

In pre-market activity on NYSE, Johnson Controls shares were losing around 7.5 percent to trade at $57.27.

For the third quarter, the company expects adjusted segment EBITA margin decline is expected to be 80 to 100 basis points, year-over-year. Further, organic revenue is expected to be higher in high-single digits.

Further, for fiscal 2022, adjusted earnings per share is now expected to be $2.95 to $3.05, lower than previous estimate of $3.22 to $3.32. The revised outlook reflects an increase of 11 percent to 15 percent year-over-year.

On average, eight analysts polled by Thomson Reuters expect earnings of $3.11 per share for the year. Analysts' estimates typically exclude special items.

Adjusted segment EBITA margin is expected to be flat to down 30 basis points, year-over-year, and organic revenue growth would be 8 percent to 10 percent.

The company said it is experiencing more near-term supply chain disruptions than expected, which have negatively impacted the pace and mix of backlog conversion.

Further, Olivier Leonetti, chief financial officer, said, "Near term uncertainties related to the lockdown in China and geopolitical instability, coupled with the impact of ongoing supply chain disruptions, warrant a more cautious outlook and a revision to our second half expectations. Looking ahead, the strength of our backlog and the improving margin profile, together with our cost savings programs, positions us to deliver on the financial targets we set for the medium term."

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