Yahoo Finance We Think You Can Look Beyond Johnson Controls International's (NYSE:JCI) Lackluster Earnings
The most recent earnings report from Johnson Controls International plc (NYSE:JCI) was disappointing for shareholders. While the headline numbers were soft, we believe that investors might be missing some encouraging factors.
View our latest analysis for Johnson Controls International
How Do Unusual Items Influence Profit?
Importantly, our data indicates that Johnson Controls International's profit was reduced by US$634m, due to unusual items, over the last year. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And that's hardly a surprise given these line items are considered unusual. Assuming those unusual expenses don't come up again, we'd therefore expect Johnson Controls International to produce a higher profit next year, all else being equal.
That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.
Our Take On Johnson Controls International's Profit Performance
Unusual items (expenses) detracted from Johnson Controls International's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Johnson Controls International's statutory profit actually understates its earnings potential! And we are pleased to note that EPS is at least heading in the right direction over the last three years. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. So while earnings quality is important, it's equally important to consider the risks facing Johnson Controls International at this point in time. Our analysis shows 3 warning signs for Johnson Controls International (1 makes us a bit uncomfortable!) and we strongly recommend you look at these before investing.
Today we've zoomed in on a single data point to better understand the nature of Johnson Controls International's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
