November 20, 2013 / 11:45 PM / 4 years ago

Johnson Controls sets $3.65 billion share repurchase, hikes dividend

The logo of the U.S. Johnson Controls company is seen in Nersac, southwestern France, January 31, 2008.Regis Duvignau

DETROIT (Reuters) - Johnson Controls Inc (JCI.N) on Wednesday said it will increase its share buyback program by $3 billion to bring the plan to $3.65 billion over the next three years.

The company's board also approved an $800 million accelerated stock repurchase agreement with Goldman Sachs & Co that will be funded this month. The remainder of the repurchase program will be utilized in the company's fiscal years 2015 and 2016.

JCI's fiscal year begins October 1.

Analyst Joseph Spak of RBC Capital Markets said the share repurchase program was not a surprise, but the size was.

"The $3 billion size speaks to management's confidence in the business and improving cash flow profile," Spak said in a research note.

JCI Chief Executive Alex Molinaroli, in a statement announcing the repurchase program, said he expects the company to show "record results in fiscal 2014 and beyond."

The JCI board also increased the company's quarterly dividend by 16 percent to 22 cents per common share.

On October 29, when JCI reported earnings for the fourth quarter ended September, it said it would curtail its autos interiors business in order to focus on areas where it sees more growth - its automotive battery line and power management systems for buildings.

The day it announced the curtailment of its autos interiors business, JCI shares rose to a 12-month high of $45.70. Shares fell 15 cents on Wednesday to close at $48.22.

Reporting by Bernie Woodall; Editing by Leslie Adler

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