Johnson Controls' strong Q2 performance punctuated with a dedication to sustainability

CORK, Ireland – Johnson Controls builds on its solid Q1 performance and finishes the second fiscal quarter 2023 with numbers exceeding guidance.

At a glance the highlights show Johnson Controls with Q2 reported sales of +10% versus the prior year; +13% organically. A Q2 GAAP EPS of $0.19; Adjusted EPS of $0.75, up 19% versus prior year. Their Q2 orders are +8% organically year-over-year, and a record backlog of $11.7 billion, increased 9% organically year-over-year. CEO George Oliver said that the company was proud of its second quarter performance.

“As we move into the second half of the fiscal year, our strategy remains sound as we continue to execute our resilient backlog, deliver on our productivity initiatives and advance our digital transformation,” Oliver said. “Our pipeline remains healthy and we expect momentum to stay positive. While global macro conditions remain uncertain, we are confident in the fundamentals we have built across our business.”

The company went on to demonstrate that they anticipate strong top line growth and backlog conversion in the second half of 2023, with the expectation of continued margin expansion. “Our second quarter results exceeded the high end of our guidance as healthy margin expansion contributed to strong double digit adjusted EPS growth,” said Olivier Leonetti, Chief Financial Officer. “Our backlog remains resilient and the pace of converting higher margin business gives us confidence in our ability to deliver on our full year expectations.”

Looking to the future, moreover, Johnson Controls recognized the market opportunity in connecting healthy, and sustainable smart buildings. “As the call for climate action intensifies, we are seeing strong tailwinds for our sustainability, infrastructure and decarbonization offerings,” Oliver said during their earnings call. “As we have stated in the past, nearly 40% of global energy emissions come from buildings. At Johnson Controls, we play a vital role in helping our customers bridge the gap towards a net zero future. Our systematic approach to digitization is creating a new class of smart buildings, helping reduce energy emissions, improve efficiency, and optimize cost. We are well positioned to capture secular trends to help build towards a more sustainable future.”

One of the ways they’re doing that is through OpenBlue, a full suite of connected AI-powered solutions that currently serves in a variety of scenarios like hospitals, schools, stadiums, and enterprise environments. Combined with their product portfolio Oliver said that Johnson Controls is making significant progress in the expansion of their global footprint, while helping to reduce their carbon one. Citing decarbonization as a focus for the company Oliver said that nearly 55% of Johnson Controls products help drive sustainability, including heat pumps, energy-efficient refrigerants, and digital solutions. Having received several recognitions for its sustainable practices, Oliver said that Johnson Controls will continue furthering their strategy in tackling global emissions.

A full release covering Johnson Controls’ second quarter fiscal results is available online at investors.johnsoncontrols.com.