DETROIT, April 23 Johnson Controls Inc
on Tuesday posted a profit that met Wall Street's expectations
and the largest U.S. auto-parts maker reaffirmed its full-year
Johnson Controls, like much of the auto industry, has been
hurt by weak demand in Europe. The supplier's results included a
tax charge related to valuation allowances in Germany and
Brazil, and a restructuring charge in its European and South
American auto interior business.
"Despite a challenging global market, we anticipate stronger
profitability in the second half of fiscal 2013 consistent with
market expectations," Chief Executive Stephen Roell said in a
statement. "Our second-half results will reflect restructuring
benefits and improved operating performance."
Net income attributable to Johnson Controls fell 61 percent
to $148 million, or 21 cents a share, in its fiscal second
quarter, compared with $379 million, or 55 cents a share, in the
Excluding one-time items, the company earned 42 cents a
share, in line with what analysts polled by Thomson Reuters
I/B/E/S had expected. Morgan Stanley analyst Ravi Shanker said
Johnson Controls' profit "steps over a low bar."
Revenue slipped 1 percent to $10.43 billion, just below the
$10.48 billion analysts had expected.
In January, Johnson Controls, citing weak auto production in
Europe, offered a second-quarter profit forecast far below Wall
Street's expectations. It said it would earn 40 to 42 cents a
share, while analysts had previously expected 51 cents.
Johnson Controls, which makes car interiors and batteries,
said the potential sale of its auto electronics business was in
the early stages and it expected to provide an update in the
next three to four months. The company said last month it had
hired JPMorgan to run the sale process, which could
attract bids topping $1 billion.
The Milwaukee, Wisconsin-based company also reaffirmed its
profit outlook for the full-year, saying it expects to earn in
the range of $2.60 to $2.70 a share. Analysts were expecting
Johnson Controls said it was comfortable with Wall Street's
consensus for a third-quarter profit of 75 cents a share. Baird
analyst David Leiker said the company's fourth-quarter implied
forecast is 10 percent above expectations.
In the second quarter, Johnson Controls said sales and
orders at its building efficiency business were hurt by soft
global demand. Sales fell 3 percent.
The auto unit also saw sales fall 3 percent as higher demand
in North America was offset by declines in Europe. Sales in the
power solutions business rose 10 percent.
Morgan Stanley's Shanker said the building efficiency was
weaker than expected, while the other two units surprised on the
Johnson Controls' shares were off 15 cents at $33.00 in
morning trading on the New York Stock Exchange.