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Johnson Controls Stock Drops As Global Sales Slump, Cyberattack Weighed On Earnings

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 Daniel Acker / Bloomberg via Getty Image

Key Takeaways

  • Johnson Controls International PLC missed earnings and revenue estimates after a decline in global sales and as the result of a cyberattack in September.
  • The company said its Building Solutions unit sales fell in the Asia-Pacific region on weakness in installations in China.
  • The September cyberattack delayed the release of Johnson Controls' earnings report, and caused a 4-cent "headwind" in earnings per share (EPS).
  • The stock fell 6% to close at $53.19.

Johnson Controls International PLC (JCI) shares fell sharply Tuesday as the provider of building technologies and software posted worse-than-expected results on a drop in global sales and the fallout from a cyberattack in September. 

The company reported fiscal fourth-quarter 2023 earnings per share (EPS) of $1.05, which included a 4-cent “headwind from the cyber incident." Revenue rose 2.7% to $6.91 billion. Both were short of forecasts.

Sales at its Global Products division dropped 2%, hurt by falling demand at residential properties. For Johnson Controls' Building Solutions segments, sales were down 7% in the Asia-Pacific region, as the installation business was negatively affected by weakness in the China market. Building Solutions sales were up 8% in North America and 7% in Europe, Middle East, Africa and Latin America.

The company announced last month that the release of the fourth-quarter report would be delayed because of the cyber-breach, which was first detected Sept. 23. In a regulatory filing, it said that the incident “caused disruptions to portions of the Company’s systems that support or provide data used in financial reporting,” and the problems required significant time and attention to address.

Johnson Controls on Tuesday predicted 2024 EPS would be in the range of approximately $3.65 to $3.80, while analysts were anticipating $3.96.
The stock fell 6% to close Tuesday's session at $53.19. The stock is down 18% for the year.
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