Friday, November 28, 2014

Johnson Controls Earnings Call

The market liked Johnson Controls' (NYSE: JCI  ) fourth-quarter results and marked the stock up more than 3% when earnings were released on Oct. 30. The stock certainly needed the boost, because up to that point it was down nearly 13% on the year. Johnson Controls investors will be looking for the earnings to spark a recovery in the stock price. Here are the five things that management hopes will take the stock higher.



Building efficiency segment set to improve


Johnson Controls is trying to expand its building efficiency segment sales in an attempt to reduce its reliance on the automobile sector -- an industry known for its cyclicality. The building efficiency segment sells heating, ventilation, and air conditioning, or HVAC, solutions. Unfortunately, this year has proven to be tougher than management expected, but the good news is that the segment's fortunes look set to improve.



On the recent conference call, CEO Alex Molinaroli first highlighted the improvement in the institutional component (the company's core HVAC market) of the Architecture Billings Index -- a key industry measure of construction growth. A reading above 50 indicates expansion.


READ THE FULL EQUITY RESEARCH ARTICLE LINKED