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How Did Johnson Controls Perform in 4Q16?

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Price movement

Johnson Controls (JCI) has a market cap of $41.7 billion. It rose 5.7% to close at $43.94 per share on November 8, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 6.5%, -1.8%, and 40.9%, respectively, on the same day. JCI is trading 1.9% above its 20-day moving average, 2.0% below its 50-day moving average, and 1.1% above its 200-day moving average.

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Related ETF and peers

The Vanguard Large-Cap ETF (VV) invests 0.10% of its holdings in Johnson Controls. The ETF tracks a market-cap-weighted index that covers 85% of the market capitalization of the US equity market. The YTD price movement of VV was 6.5% on November 8. The market caps of Johnson Controls’ competitors are as follows:

  • Honeywell International (HON) — $84.4 billion
  • Raytheon (RTN) — $40.4 billion
  • Lear (LEA) — $8.6 billion

Performance of Johnson Controls in fiscal 4Q16

Johnson Controls reported fiscal 4Q16 net sales of $10.2 billion, a rise of 17.2% over the net sales of $8.7 billion in fiscal 4Q15. Sales from the building efficiency and power solutions segments rose 25.2% and 7.5%, respectively, and sales from the automotive experience segment fell 5.2% between fiscal 4Q15 and fiscal 4Q16. The company’s gross profit margin expanded by 240 basis points.

Its net income and EPS (earnings per share) fell to -$1.2 billion and -$1.61, respectively, in fiscal 4Q16, compared with $349 million and $0.53, respectively, in fiscal 4Q15. It reported adjusted EPS of $1.21 in fiscal 4Q16.

Fiscal 2016 results

In fiscal 2016, JCI reported net sales of $37.7 billion, a rise of 1.3% YoY (year-over-year). The company’s gross margin expanded by 210 basis points in fiscal 2016. Its net income and EPS fell to -$868.0 million and -$1.30, respectively, in fiscal 2016, compared with $1.6 billion and $2.36, respectively, in fiscal 2015.

JCI’s cash and cash equivalents and inventories rose 14.6% and 49.8%, respectively, in fiscal 2016. Its current ratio and long-term debt-to-equity ratio rose to 1.04x and 0.61x, respectively, in fiscal 2016, compared with 1.00x and 0.56x in fiscal 2015. In the next and final part of this series, we’ll discuss GoPro (GPRO).

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