Cork-headquartered Johnson Controls benefits from AI-driven data centre expansion

The global headquarters of Johnson Controls at One Albert Quay, Cork. The company raised its annual profit forecast on Wednesday.

Cork-headquartered industrial supplier Johnson Controls International on Wednesday raised its annual profit forecast above Wall Street estimates, as demand for its data centre thermal management and cooling solutions continues to rise.

Net sales in the company's second fiscal quarter increased 8% to $6.14bn (€5.22bn) - above $5.68bn (€4.83bn) a year earlier - while organic sales increased 6%. The company, which offers IT cooling, security, and fire systems, has been benefiting from AI-driven data centre expansion, part of a broader upswing for firms supplying essential infrastructure for the AI boom.

In February, Johnson Controls celebrated its 10-year anniversary at One Albert Quay in Cork. 

“We delivered another quarter of strong execution, converting sustained demand into consistent growth, margin expansion, and 45% adjusted EPS (earnings per share) growth,” said Johnson Controls chief executive Joakim Weidemanis. “Orders grew 30% and backlog reached a record $20 bn, reflecting strength in data centres and other high‑growth, technology‑driven operating environments where we differentiate. 

"While we remain early in our business system journey, we are encouraged by the momentum we are seeing across the organisation. With a strong first‑half performance, we are raising our full‑year guidance and remain focused on delivering long‑term value for our customers and shareholders.”

Growing AI compute capacity has driven a sharp rise in cooling needs, leading customers to focus on energy-efficient thermal management solutions which can reduce energy and water consumption.

Johnson Controls raised annual adjusted profit estimates to $4.85 per share from a prior forecast of $4.70. Analysts on average were expecting $4.76 per share, according to data compiled by LSEG.

The company forecast third-quarter adjusted profit of $1.28 per share, which was in line with analysts' estimates. It reported adjusted profit of $1.19 per share for the second quarter, compared with 82c per share a year ago.

US-listed shares of the Cork-based company fell 1% in premarket trading following the results.

Additional reporting by Reuters