Dec 18 Johnson Controls Inc forecast
lower 2014 earnings than analysts were expecting on Wednesday,
as it plans to buy and sell assets to reduce dependence on the
low-margin automotive sector in favor of its power business.
Shares of Johnson Controls, the largest U.S. auto parts
maker, fell 2.6 percent to $50.01 in Wednesday afternoon
The company expects 2014 earnings between $3.15 and $3.30
per share, below the average analyst estimate of $3.31 per
share, according to Thomson Reuters I/B/E/S.
The company said it expected revenue of $43.8 billion next
year, slightly below the average analyst estimate of $43.87
Milwaukee-based Johnson Controls makes car interiors and
batteries as well as heating, cooling and ventilation systems
(HVAC) for buildings.
The company said in October that it would explore strategic
options for its loss-making automotive interiors business to
focus instead on its automotive battery line and power
Johnson Controls also sold part of its automotive
electronics business this year to Gentex Corp for about
Sales of the rest of the automotive electronics business,
which had been expected, should come by February, Chief
Executive Officer Alex A. Molinaroli said in an interview.
"We're within 30 to 60 days of hopefully announcing an
agreement, and then going through the process of closing," said
Molinaroli, who has worked at the company since 1983 and became
CEO in October.
Broadly, Molinaroli said he wants to transform Johnson
Controls into a company focused on batteries and HVAC products,
and lessen its reliance on the automotive sector.
While the company will slowly move away from the auto
sector, it will remain heavily involved in making seats for
cars, Molinaroli said.
"It's really the core of our auto business," he said.
In the company's HVAC business, which sells directly to
other businesses as well as consumers, Molinaroli said he sees
the most growth potential in providing repair services to
Johnson Controls said it expected sales from its power
solutions unit to increase 7 percent to 8 percent in 2014.
Sales from its automotive electronics business are expected
to fall 2.5 percent to 3 percent in 2014, and sales from its
interiors business are expected to be flat to down 1.5 percent.