What Happened?
Shares of building operations company Johnson Controls (NYSE: JCI) jumped 12% in the morning session after the company reported strong first-quarter results, with organic revenue growing 10% year-on-year, exceeding analysts' expectations. This was driven by a 16% increase in orders and an 11% rise in its Building Solutions backlog. Looking ahead, its EPS guidance for next quarter came in higher than Wall Street's estimates. Zooming out, we think this was a good quarter with some key areas of upside.
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What The Market Is Telling Us
Johnson Controls’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. Moves this big are rare for Johnson Controls and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 9.2% on the news that the company reported second-quarter earnings results, with EPS exceeding analysts' estimates. Full-year EPS guidance was also ahead of expectations.
On the other hand, its revenue unfortunately missed. Strategically, the company "announced divestitures of our R&LC HVAC and Air Distribution Technologies businesses, representing roughly 20% of sales, marking a pivotal milestone in our transformation into a pure-play provider of comprehensive solutions for commercial buildings and is a significant step to unlock value for our shareholders." Overall, this quarter was still solid.
Johnson Controls is up 9.9% since the beginning of the year, and at $86.77 per share, has set a new 52-week high. Investors who bought $1,000 worth of Johnson Controls’s shares 5 years ago would now be looking at an investment worth $2,180.
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