Johnson Controls Reports $451 Million Net Income and $5.426 Billion Revenue for December 2024

Johnson Controls International plc reported a net income of $451 million for the three months ended December 31, 2024, an increase from $404 million in the same period last year. The company's revenue rose to $5.426 billion, up 4% from $5.209 billion in the prior year, driven by strong organic sales growth across its segments. Notably, the Building Solutions North America segment saw a 10% increase in sales, primarily due to robust demand in applied HVAC and controls, while the Global Products segment experienced an 8% decline, largely attributed to divestitures.

The company’s gross profit also improved, reaching $1.926 billion, an 8% increase from $1.778 billion a year earlier, resulting in a gross margin of 35.5%. This improvement was attributed to margin enhancements in the Building Solutions segments, which benefited from a strategic focus on higher-margin projects. Selling, general, and administrative expenses rose to $1.399 billion, reflecting increased transformation and transaction costs. The effective tax rate for the quarter was 11.5%, a significant increase from a negative 6.3% in the previous year, primarily due to changes in tax planning and the establishment of deferred tax liabilities.

Strategically, Johnson Controls is undergoing significant portfolio simplification, including the planned divestiture of its Residential and Light Commercial HVAC business to Bosch for approximately $8.1 billion. This transaction is expected to close in the fourth quarter of fiscal 2025 and is part of the company's broader strategy to focus on its core building solutions business. The company also initiated a multi-year restructuring plan aimed at reducing costs and optimizing operations, with expected one-time costs of around $400 million and annual savings of approximately $500 million upon completion.

Operationally, Johnson Controls reported a backlog of $15.3 billion as of December 31, 2024, indicating strong future demand for its products and services. The company’s total debt increased to $9.993 billion, with a net debt of $8.756 billion, reflecting ongoing investments and share repurchase activities. The company declared a dividend of $0.37 per share and has approximately $1.4 billion remaining under its share repurchase authorization, indicating a commitment to returning value to shareholders.

Looking ahead, Johnson Controls anticipates continued growth driven by increasing demand for smart, sustainable building solutions, supported by favorable regulatory environments and government incentives. However, the company remains cautious about potential challenges, including macroeconomic conditions, supply chain disruptions, and geopolitical tensions that could impact its operations and financial performance.