Johnson Controls Tops Q3 Earnings & Revenue Estimates, Raises FY26 View

Q3 Segmental Results

Effective from the third quarter of fiscal 2025, the company started reporting under three segments, namely Americas, EMEA and APAC.

Americas: Revenues were $4.50 billion, up 11% year over year. The Zacks Consensus Estimate was pegged at $4.34 billion.

Organic sales also increased 11%, driven by continued strength across the applied heating, ventilation and air conditioning (HVAC) business. Adjusted segment EBITA increased 27% year over year to $951 million.

EMEA: Revenues totaled $1.26 billion, down 1% year over year. The Zacks Consensus Estimate was pegged at $1.25 billion.

Organic sales rose 1%, with both products and systems and services increasing 1%. Adjusted EBITA was $181 million, up 1% year over year.

APAC: Revenues increased 15% to $846 million. The Zacks Consensus Estimate was pegged at $777 million.

Sales rose 15% organically, driven by 20% growth in products and systems and continued strength in the applied HVAC business. Adjusted EBITA was $179 million, up 25% year over year.

Margin Profile

In the fiscal third quarter, Johnson Controls’ cost of sales increased 8.8% year over year to approximately $4.14 billion. Gross profit increased 10.2% year over year to $2.47 billion and the margin rose 30 basis points (bps) to 37.4%. Selling, general and administrative expenses were $1.41 billion, down 0.7% year over year.

Financial Position

Johnson Controls had cash and cash equivalents of $641 million as of June 30, 2026, compared with $379 million at the end of fiscal 2025 (ended Sept. 30, 2025). Long-term debt was $8.30 billion compared with $8.59 billion at the end of fiscal 2025.

In the first nine months of fiscal 2026, the company generated net cash of $2.57 billion from operating activities compared with $1.59 billion in the year-ago period. It reported adjusted free cash flow of $2.13 billion in the same period compared with $1.79 billion in the prior-year period.

The company paid dividends worth $734 million and repurchased shares worth $850 million in the first nine months of fiscal 2026.

Q4 Guidance

Johnson Controls anticipates organic revenue growth of 9-10% from the year-ago level. Operating leverage is estimated to be 45-50%. It expects adjusted earnings to be about $1.55 per share.

FY26 Guidance

Johnson Controls currently anticipates organic revenue growth to be about 8% from the prior-year level compared with approximately 6% expected earlier. Operating leverage is expected to be 45-50% compared with approximately 50% projected previously. It expects adjusted earnings per share to be approximately $5.05, higher than $4.85 projected previously. It expects adjusted free cash flow conversion of about 100%.

JCI's Zacks Rank

The company currently carries a Zacks Rank #2 (Buy). 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

Constellium SE CSTM came out with quarterly earnings of $1.04 per share in the second quarter of 2026, beating the Zacks Consensus Estimate of $0.91 per share. This compares with earnings of $0.25 per share a year ago.

Constellium posted revenues of $2.75 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 3.5%. This compares with year-ago revenues of $2.1 billion.

Generac Holdings Inc. GNRC came out with quarterly earnings of $2.91 per share in the second quarter of 2026, beating the Zacks Consensus Estimate of $1.95 per share. This compares with earnings of $1.65 per share a year ago.

Generac Holdings posted revenues of $1.17 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.37%. This compares with year-ago revenues of $1.06 billion.

Graco Inc. GGG reported second-quarter 2026 adjusted earnings of 91 cents per share, up 17% from 78 cents in the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate of 81 cents by 12.4%.

The company’s net sales rose 3% year over year to $590.6 million but lagged the consensus estimate of $609 million by 3%. Organic order backlog (excluding acquisitions) rose 28% from the end of 2025.

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