Johnson Controls International PLC

The stable outlook reflects our view that JCI will continue to benefit from its good market positions and operational scale and to enjoy solid demand for its climate and security products. Order growth and margin expansion in the North American and EMEA/Latin America regions, along with continued realization of synergies and productivity gains, are supporting factors, partially offset by restructuring costs. Following the company's major debt reduction in fiscal 2019, we believe management will retain an appropriate capital structure for the rating. We expect JCI to maintain an adjusted debt-to-EBITDA ratio near 2.5x, with free operating cash flow to debt near 20%. If global macroeconomic weakness or competitive dynamics become sufficiently adverse to cause the company's adjusted debt-to-EBITDA ratio to

...Johnson Control International PLC's (JCI) recent earnings release was solid. Johnson Controls reported moderate organic sales growth of 3% to $5.6 billion and a 40-basis-point organic improvement in its reported EBITA margin to 11.2% for its first fiscal quarter ended Dec. 31, 2019. The growth rate provides a good start to achieving its guidance of 2%-3% organic sales growth for the year. The company continues to realize synergies/productivity gains, having achieved $196 million of these savings in fiscal 2019. While field order growth was flat in the quarter, the company ascribes this to difficult comparisons arising from the timing of its price increases; absent that, field orders would have grown by the low single digits. We expect them to grow by a mid-single-digit percentage in the second quarter. JCI has healthy backlogs in its regions. Its North American and Europe, Middle East, and Africa (EMEA) and Latin American building solutions segments' backlogs grew organically by 7% and...

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