* Sees FY 2012 EPS $2.85 to $3 vs Street view $3.10
* Sees FY 2012 sales $44.2 bln vs Street view $44.6 bln
* Shares up about 5.8 pct
By Nick Zieminski
NEW YORK, Oct 12 (Reuters) - Johnson Controls Inc said on Wednesday it expected profits to increase by 20 percent in its 2012 fiscal year despite weaker-than-expected economic growth and auto production, and its shares rose about 5.8 percent.
The company's fiscal-year forecast was slightly below recently-lowered Wall Street estimates, but analysts and investors called the company's guidance conservative.
The maker of auto interiors and batteries and building efficiency systems would have set higher earnings per share targets, but expectations for economic growth and auto production have come down in recent weeks, Chief Executive Steve Roell said.
Roell described the economic environment as mixed but said in an interview the consumer sentiment that drives many of the company's markets could revive quickly.
"If we just had some general certainty in the tone of the economy and the political environment, there's the opportunity for very good growth in the next three years," Roell said. "We've just got to get through this period of time."
When gasoline prices recently retreated, many consumers quickly shifted preferences from passenger cars to pick-up trucks.
"It shows you how quickly the American mindset can change from a consumer standpoint," Roell said.
The company forecast fiscal 2012 earnings of $2.85 to $3 per share, a 20-percent increase from expected 2011 levels at the midpoint, on sales of $44.2 billion. The sales target would mean a rise of 9 percent from fiscal 2011.
Analysts on average were forecasting the Milwaukee-based company would earn $3.10 a share on revenue of $44.6 billion in fiscal 2012, which began this month. Estimates have come down in recent weeks, with several analysts cutting their forecasts in the past week. Analysts have cited weaker North American and European economies, lower auto production than previously expected, and a still-weak U.S. construction market.
The 2012 forecast "was in line with the buyside expectations," said RJ Bukovac, principal with William Blair & Co, which holds Johnson Controls shares. "It's conservative in light of the strengthening dollar and some softening in the automotive outlook, especially outside the U.S."
Bukovac said China's auto market was cooling and expectations for non-residential construction have come down in recent months, but Johnson Controls is gaining market share with its building efficiency systems. He said the company, which set a capital spending target of $1.7 billion for fiscal 2012, was investing appropriately in high-margin areas like its battery business.
Johnson Controls typically offers conservative guidance at the start of its fiscal year, analysts say. In past years, its full-year earnings have consistently topped the range the company introduced at the start of the year.
The company said it expects margin improvements in all three of its businesses -- Automotive Experience, Power Solutions and Building Efficiency -- for 2012. It expects automotive production in 2012 to be higher in North America and China, and relatively flat in Europe.
It forecast production of 13.7 million vehicles in North America in fiscal 2012, up almost 10 percent from the previous year and about in line with industry forecasts. It estimated production of 20.1 million vehicles in Europe, up slightly, and 16.5 million in China, up 8 percent.
It forecast less than 2 percent growth in non-residential construction in the United States and Europe but stronger growth in Asia, Latin America and the Middle East, but executives stressed that new construction accounts for less than 20 percent of segment sales, which are driven by services and demand retrofit.
It said a weaker euro would hurt results in its auto interiors business, its biggest, but forecast 21 percent growth in China, where it has 44 percent of the seating market.
China will also help its battery business, where sales are expected to rise 11 percent to 13 percent in fiscal 2012. The company forecast a 9 percent to 11 percent sales increase in its building efficiency business.
Johnson Controls also announced a preliminary fourth-quarter profit that was short of estimates.
The company, slated to report fourth-quarter results on Oct. 27, said it expects adjusted profit of 75 cents a share on sales of $10.7 billion. Analysts, on average, were expecting 78 cents a share on sales of $10.5 billion, according to Thomson Reuters I/B/E/S.
Johnson Controls shares rose $1.75 to $31.89 in late trading on the New York Stock Exchange.