12:59 PM EDT, 07/31/2024 (MT Newswires) -- Johnson Controls International ( JCI ) announced plans on Wednesday to begin a search for a new chief executive while saying that it appointed a board member following discussions with activist investor Elliott Investment Management.

The building products company said that CEO George Oliver will retire once Johnson Controls ( JCI ) identifies his replacement. Oliver, who has been CEO since 2017, will continue to serve as chairman of the board.

The company said it appointed Patrick Decker, former CEO of water technology provider Xylem, to its board following a "constructive dialogue" with Elliott. Shares of Johnson Controls ( JCI ) were up 4.4% in midday trade.

"As we approach the completion of our business transformation and move to the next phase of growth, I believe that now is the right time to begin the process of identifying the next leader of the new Johnson Controls ( JCI )," Oliver said.

Last week, Johnson Controls ( JCI ) announced that it was selling its residential and light commercial heating, ventilation, and air conditioning business, which represents about 20% of sales. "As one of Johnson Controls' ( JCI ) largest investors, we believe the leadership and board actions announced today, along with the recent portfolio changes, position the company to realize the benefits of its transformation, enhance operational performance and drive significant shareholder value creation," Marc Steinberg, partner at Elliott, said.

For the fiscal third quarter, revenue climbed to $7.23 billion from $7.13 billion a year ago but missed the $7.34 billion average analyst estimate on Capital IQ. Adjusted earnings per share rose to $1.14 for the three months ended June 30 from $1.03 and beat the $1.08 market view.

Products and systems' revenue slid to $5.42 billion from $5.43 billion in the same period of 2023 while services revenue increased to $1.81 billion from $1.7 billion. Building solutions backlog rose 10% on an organic basis to $12.9 billion, reaching "record levels" and building on momentum to drive profitable growth, Oliver said.

The company narrowed its full-year adjusted EPS guidance to a range of $3.66 to $3.69 compared with a prior forecast of $3.60 to $3.75. It now expects organic sales growth of 3% compared with mid-single-digit growth previously expected. The Capital IQ-polled consensus is for normalized EPS of $3.58 and reported revenue of $27.67 billion in the ongoing year.

For the fourth quarter, Johnson Controls ( JCI ) expects organic sales to be up 7% year over year and adjusted EPS to range between $1.23 and $1.26. Analysts are forecasting reported revenue and normalized EPS of $7.54 billion and $1.19, respectively.

Price: 71.96, Change: +2.93, Percent Change: +4.24