Johnson Control reports 22 percent revenue increase in Q3 2010

July 24th, 2010 - 2:15 am ICT by BNO News  

MILWAUKEE, WISCONSIN (BNO NEWS) — Johnson Controls on Friday announced that it has had a 22 percent revenue increase in the third quarter of 2010 with higher sales in each of its three businesses.

With net sales of $8.5 billion compared to $7.0 billion in last year’s third quarter, Johnson Control, a global diversified technology and industrial leader present in over 150 countries, is expecting earnings for fiscal 2010 to be at the high end of its previously disclosed guidance.

The company’s third quarter has been overall successful, reporting a significant increase in its segment margin. With income from business segments of $496 million compared with $282 million a year ago, Johnson Controls had a 76 increase. In addition, its net income of quarter three totaled at $418 million compared to $163 million from last year.

Diluted earnings per share of $0.61 represents a good rise from last year’s $0.26.

The 2010 quarter includes a non-cash tax benefit of $51 million, or $0.07 per share, while the 2009 quarter included a non-cash tax benefit of $9 million, or $0.01 per share. Excluding these non-recurring items, net income in the current quarter was $367 million or $0.54 per share, while net income in the prior year quarter was $154 million or $0.25 per share. The company said it believes that using the adjusted numbers provide a more meaningful comparison of its underlying operating performance.

The company reported that the quarter was negatively impacted by approximately $0.03 per share due to both the weaker Euro and a non-cash impairment charge in its automotive business in Japan.

“We are pleased with our third quarter results. We capitalized on the recovery in several of our markets, leveraging our market leadership and improved cost structure to gain share and improve profitability,” said Stephen A. Roell, Johnson Controls Chairman and Chief Executive Officer.

“Sales in our automotive and power businesses grew at a double-digit pace, and our Building Efficiency business generated top-line growth for the first time in more than a year. In addition, the Building Efficiency order rate increased 9%, nearly double the pace of the second quarter, which exceeded our expectations,” Roell added, stating that the current market environment has presented opportunities for growth investments.

“To support our growth strategies in Asia, we will purchase the remaining shares of our Korean Power Solutions joint venture,” Roell said. “We also made an equity investment in Tachi-S to enable greater collaboration with this important automotive seating and interiors supplier and to ultimately expand our relationships with Asian automakers. Additionally, we continue to accelerate our investments in Power Solutions manufacturing capacity and vertical integration. In Building Efficiency, increased investments are focused on significantly increasing our service sales and delivery capabilities, especially in the areas of clean technologies and energy efficiency.”

Johnson control also updated its financial guidance for 2010, where its net sales expectation is unchanged at $33.5 billion (up 18%), with a revised Euro assumption of $1.30 versus the prior Euro assumption of $1.35. In addition, earnings for the 2010 fiscal year are now expected to approximate $1.95 per diluted share. The company had previously guided to $1.90 - $1.95 per diluted share. The company said that higher automotive production estimates will be partially offset by the negative impact of the lower Euro.

“As we enter the final quarter of our fiscal year, automotive production forecasts along with the higher buildings order rate and backlog support our expectations for continued improvements in sales and income,” said Roell. “We will continue to use our strong balance sheet and cash flows to make strategic investments that will help us further outpace the growth rates of our markets. We believe we are positioned to deliver sustainable, profitable growth.”

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