Johnson Controls sees higher sales, earnings
NEW YORK (Reuters) - Johnson Controls Inc (JCI.N) said on Tuesday it expects higher sales next year as global auto production recovers, U.S. stimulus efforts pay off and emerging markets improve, but the company's forecast disappointed some on Wall Street and its shares fell nearly 3 percent.
The maker of car interiors, batteries and building-efficiency systems said it is gaining market share in many of its businesses and is benefiting from recent cost cuts, while higher auto production levels should support volumes.
The company said it expects to earn 40 to 42 cents per share for its fourth quarter, ended September 30, on sales of about $7.9 billion, with all of its geographic automotive businesses posting a profit. The result would be above the 39 cents per share analysts have been expecting, according to Thomson Reuters I/B/E/S.
For the new fiscal year now under way, it said sales should rise 9 percent to about $31 billion, above the $30.2 billion analysts have been expecting, and it should earn $1.35 per share to $1.45 per share. Analysts, on average, have forecast
$1.44.
"Profitable growth is back. We see improvements across our businesses," Chief Executive Stephen Roell said in an interview, on the sidelines of an analyst meeting in New York.
"Even though we have a late cycle in building efficiency, we feel good about the potential there to grow. We're really well positioned to take (market) share."
JPMorgan analyst Himanshu Patel said in a research note the company's 2010 earnings outlook was a touch below its expectations.
But Patel added the stock has the potential to rise up to $44 in the long term, driven by robust growth in batteries and building-efficiency systems.
Roell said he saw reasons for caution, citing the uncertain strength of U.S. consumer spending, since improving retail sales have yet to translate to strong sales of durable goods like cars.
"We were accused today of conservatism in our outlooks. It's probably that (consumer) element that we're waiting to get more evidence on."
The Milwaukee-based company said it expects auto production to recover in North America and China and is launching new products in Europe.
The world's largest maker of auto interiors estimated North American auto production of 9.8 million vehicles in 2010, up from about 8.6 million in 2009.
Roell said the company can break even at 8.3 million units of vehicle production in North America as a result of job reductions and other cost-cuts.
European production should be flat, at 15.8 million vehicles, while China's output of passenger vehicles is expected to jump to 8.3 million vehicles from 7 million. Continued...
