Johnson Controls Forecasts 11% to 12% Organic Growth for Fiscal 2027

Johnson Controls forecast 11% to 12% organic sales growth in fiscal 2027 and about $900 million in capital spending, outlining expansion plans after a sharp increase in orders and backlog.

The company’s outlook also calls for adjusted earnings of $6.15 to $6.30 per share. CEO Joakim Weidemanis said on the Oct. 27 earnings call, “We expect approximately $900 million of capital expenditures in fiscal 2027.” He said the spending is intended to expand capacity and improve lead times, delivery and quality.

Fourth-quarter orders climbed 44% organically year over year. Backlog across Johnson Controls’ Solutions and Services businesses totaled $23.0 billion, up 43% organically year over year. The company tied order growth to data-center demand and activity in other mission-critical areas, including battery and semiconductor manufacturing and large research universities.

For the three months ended Sept. 30, sales increased 10% to $7.1 billion, while organic sales grew 12%. Adjusted earnings were $1.66 per share, compared with GAAP earnings of $1.60 per share.

The fiscal 2027 forecast also includes operating leverage above 30% and adjusted free-cash-flow conversion of about 95%. For the first quarter, Johnson Controls expects organic growth of 12% to 14% and adjusted earnings of $1.15 to $1.20 per share.

The company defines organic growth as sales growth excluding the effects of acquisitions, divestitures and foreign currency. It said it could not quantitatively reconcile its forward-looking non-GAAP measures with GAAP figures because it could not reliably forecast the necessary inputs without unreasonable effort or expense.