Johnson Controls’s (NYSE:JCI) Q1 CY2026: Beats On Revenue

Building operations company Johnson Controls (NYSE:JCI) reported Q1 CY2026 results exceeding the market’s revenue expectations, with sales up 8.2% year on year to $6.14 billion. Its non-GAAP profit of $1.19 per share was 6.4% above analysts’ consensus estimates.

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"We delivered another quarter of strong execution, converting sustained demand into consistent growth, margin expansion, and 45% adjusted EPS growth," said Joakim Weidemanis, Chief Executive Officer of Johnson Controls.

Company Overview

Founded after patenting the electric room thermostat, Johnson Controls (NYSE:JCI) specializes in building products and technology solutions, including HVAC systems, fire and security systems, and energy storage.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, Johnson Controls’s 6.2% annualized revenue growth over the last five years was mediocre. This was below our standard for the industrials sector and is a poor baseline for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Johnson Controls’s recent performance shows its demand has slowed as its annualized revenue growth of 4.4% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.

Johnson Controls also reports organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Johnson Controls’s organic revenue averaged 6.4% year-on-year growth. Because this number is better than its two-year revenue growth, we can see that some mixture of divestitures and foreign exchange rates dampened its headline results.

This quarter, Johnson Controls reported year-on-year revenue growth of 8.2%, and its $6.14 billion of revenue exceeded Wall Street’s estimates by 1.4%.

Looking ahead, sell-side analysts expect revenue to grow 6% over the next 12 months. While this projection indicates its newer products and services will spur better top-line performance, it is still below average for the sector.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Johnson Controls has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 9.1%, higher than the broader industrials sector.

Analyzing the trend in its profitability, Johnson Controls’s operating margin rose by 2 percentage points over the last five years, as its sales growth gave it operating leverage.

In Q1, Johnson Controls generated an operating margin profit margin of 14%, up 3.8 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Johnson Controls’s EPS grew at 13% compounded annual growth rate over the last five years, higher than its 6.2% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Johnson Controls’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, Johnson Controls’s operating margin expanded by 2 percentage points over the last five years. On top of that, its share count shrank by 14.9%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Johnson Controls, its two-year annual EPS growth of 14.1% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q1, Johnson Controls reported adjusted EPS of $1.19, up from $0.82 in the same quarter last year. This print beat analysts’ estimates by 6.4%. Over the next 12 months, Wall Street expects Johnson Controls’s full-year EPS of $4.39 to grow 17.3%.

Key Takeaways from Johnson Controls’s Q1 Results

It was great to see Johnson Controls’s full-year EPS guidance top analysts’ expectations. We were also happy its revenue and EPS outperformed Wall Street’s estimates in the quarter. Overall, this print had some key positives. The stock remained flat at $145.22 immediately after reporting.

Johnson Controls had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).