Making a positive start to the fiscal year, diversified technology company Johnson Controls (JCI) reported higher first-quarter earnings, which also beat the estimates. The company is looking for positive earnings and topline performance in 2019, reflecting the stable backlog and organic sales growth.
In the first quarter, adjusted earnings rose 24% to $0.26 per share, beating Wall Street estimates by a penny. Reported income from continuing operations, including special items, was $107 million or $0.12 per share, compared to a loss of $75 million or $0.08 per share in the first quarter of 2018.
The turnaround was driven by a 3% increase in net sales to $5.46 billion, which was broadly in line with the market forecast. Reflecting the sustained momentum in orders and backlog, the company achieved organic sales growth of 6%.
The company is looking for positive earnings and topline performance in 2019, reflecting the stable organic sales growth
“While we continue to monitor the global macro-economic environment, we remain committed to driving execution across the organization, leveraging our large installed base and service offerings, and driving continued synergies and productivity initiatives,” said CEO George Oliver.
Buoyed by the positive first-quarter results, the management is currently predicting organic sales growth in the mid-single digits for fiscal 2019. Full-year adjusted earnings are expected to be in the range of $1.75 per share to $1.85 per share, which represents a 10-16% annual growth. The effective tax rate is estimated to be 13.5%, up from 12.1% in fiscal 2018.
Also see: Johnson Controls Q1 2019 Earnings Conference Call Transcript
During the quarter, around 14 million shares were repurchased for $467 million. The company said it is on track to close the proposed sale of its Power Solutions business in the third quarter of the current fiscal year.
Johnson Controls’ shares slid more than 15% since last year. After plunging to a multi-year low toward the end of last year, the stock started regaining momentum in recent weeks. It traded lower in the early hours of Friday’s session.