Upcoming AWS Coverage on LKQ Corp. Post-Earnings Results

LONDON, UK / ACCESSWIRE / February 15, 2017 / Active Wall St. announces its post-earnings coverage on Johnson Controls International PLC (NYSE: JCI). The Company posted its first quarter fiscal 2017 operational and financial results on February 01, 2017. The maker of automotive batteries and building heating and cooling systems' earnings results surpassed market expectations. Register with us now for your free membership at:

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One of Johnson Controls International's competitors within the Auto Parts space, LKQ Corp. (NASDAQ: LKQ), announced on February 02, 2017, that it will release its Q4 and full year 2016 financial results before the market opens on Thursday, February 23, 2017. AWS will be initiating a research report on LKQ Corp. in the coming days.

Today, AWS is promoting its earnings coverage on JCI; touching on LKQ. Get our free coverage by signing up to:

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Earnings Reviewed

For the quarter ended December 31, 2016, Johnson Controls reported sales of $7.086 billion, up slightly compared to the prior year sales of $7.066 billion. The Company's sales number came in slightly below analysts' consensus of $7.093 billion. Johnson Controls' organic sales growth of 1% and higher lead pass-through was mostly offset by the negative impact of foreign currency translation and net acquisition and divestiture activity.

For Q1 FY17, Johnson Controls Earnings before interest and taxes ("EBIT") was $521 million and the EBIT margin was 7.4%. Adjusted EBIT was $757 million, up 10% on a y-o-y basis (up 13% excluding foreign exchange and lead cost increases) with adjusted EBIT margin expansion of 90 basis points, to 10.7%.

For Q1 FY17, Johnson Controls reported GAAP earnings from continuing operations of $372 million, or $0.39 per share, compared to earnings from continuing operations of $452 million, or $0.48 per share, in Q1 FY16. On an adjusted basis, the Company reported earnings from continuing operations of $502 million, or $0.53 per share, up 11% and 10%, respectively. The Company's earnings numbers surpassed analysts' forecasts of $0.52 per share.

Segment Results

Johnson Controls' Buildings sales in Q1 FY17 were $5.2 billion, down 2% on a y-o-y basis. Excluding the net impact of acquisition and divestiture activity, as well as foreign exchange, organic sales declined 1% versus the prior year, driven by a decline in product revenue. Buildings' adjusted segment EBITA was $578 million for Q1FY17, up 3% on a y-o-y basis. Adjusted segment's EBITA margin of 11.1% was an increase of 60 basis points compared to the prior year's same quarter as benefits from productivity and cost synergies more than offset incremental product and channel investments.

The Building segment's orders in Q1 FY17, excluding M&A and adjusted for foreign exchange, increased 2% on a y-o-y basis, as 3% growth in field orders was partially offset by a 3% decline in product orders. Backlog at the end of the reported quarter was $8.1 billion, increasing 6% y-o-y, excluding M&A and adjusted for foreign exchange.

Johnson Controls' Power Solutions' sales in Q1 FY17 were $1.9 billion, up 9% on a y-o-y basis. Global original equipment battery shipments were consistent with the prior year and aftermarket shipments increased 7% in the reported quarter.

Power Solutions adjusted segment EBITA was $390 million for Q1 FY17, up 8% on a y-o-y basis due to higher volumes and favorable mix, which was partially offset by the impact of lead. Adjusted segment EBITA increased 12%, excluding the impact of foreign exchange and lead. Adjusted segment EBITA margin of 20.5% was a decrease of 20 basis points compared to the prior year's corresponding quarter, including a 110 basis point headwind related to the impact of lead. Excluding the impact of lead, the segment's EBITA margin increased 90 basis points y-o-y.

$500 Million Notes

On February 02, 2017 Johnson Controls announced in a separate press release that it priced a public offering of $500 million principal amount of fixed rate senior notes that mature in 2047 and bear interest at a rate of 4.500% per annum. The Company expects that it will receive approximately $490 million of net proceeds from the offering after deducting underwriting discounts and commissions and estimated expenses of the offering. The Company intends to use the net proceeds from the offering to repay outstanding commercial paper borrowings and for other general corporate purposes.

On February 02, 2017, Moody's Investors Service assigned a Baa1 rating to Johnson Controls $500 million of new senior unsecured notes due 2047.

Balance Sheet & Cash Flow

As of December 31, 2017 Johnson Controls had cash and cash equivalents of $377 million compared to $579 million as of September 30, 2016. The Company's long-term debt totaled $10.35 billion as of December 31, 2016, from $11.09 billion as on September 30, 2016.

For Q1 FY17, Johnson Controls' operating cash outflow was $1.9 billion compared to $13 million in Q1 FY16.

Stock Performance

At the closing bell, on Tuesday, February 14, 2017, Johnson Controls' stock was marginally down by 0.62%, ending the trading session at $41.49. A total volume of 6.17 million shares were traded at the end of the day, which was higher than the 3-month average volume of 5.73 million shares. In the last twelve months, shares of the Company have advanced 23.92%. Moreover, the stock gained 0.73% since the start of the year. The stock has a dividend yield of 2.70%.

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SOURCE: Active Wall Street