Johnson Controls sees higher FY sales, earnings

The maker of car interiors, batteries, and building efficiency systems said it was gaining market share in many of its businesses, and was benefiting from recent cost cuts, while higher auto production levels would support volumes.

The diversified manufacturer said it expected to report earnings of 40 cents to 42 cents per share for the fourth quarter ended on Sept. 30, with all its automotive geographic regions posting profit. The result would be 1 cent to 3 cents more than the 39 cents analysts are expecting, according to Thomson Reuters I/B/E/S.

For the new fiscal year now under way, it said sales would rise 9 percent to about $31 billion, a little less than $1 billion more than analysts are expecting, and it would earn $1.35 to $1.45 per share, while analysts had forecast $1.44.

Johnson Controls said it expected auto production to recover in North America and China and was launching new products in Europe.

Higher auto production would boost sales in its power solutions segment by 17 percent next year, or 6 percent excluding the impact of higher lead prices. And it predicted a 3 percent sales increase in its building efficiency business, helped by demand in emerging markets.

The company, which is retrofitting New York's Empire State building to reduce energy use, predicts U.S. commercial construction will begin to recover in the second half of 2010.

IMPROVING PROFITS

Johnson Controls said longer-term profit margins will be stronger than previously expected in the auto interiors and battery units, but kept forecasts unchanged for the buildings segment.

The company said it expected government stimulus-funded projects to begin to have a meaningful effect on revenues this year, and weakness in North America would be offset by less economically sensitive institutional markets and several emerging markets.

"Johnson Controls is positioned to grow faster than our underlying markets with improved profitability," Chief Executive Officer Stephen Roell said in a statement.

"We expect to deliver profitable growth in 2010, with accelerating benefits in 2011 and beyond as our markets recover," he said.

When it reported a 63 percent plunge in quarterly profit in July, Johnson Controls said it expected earnings to rise through the remainder of the year and into fiscal 2010. (Reporting by Nick Zieminski and Christopher Kaufman, editing by Dave Zimmerman)