Bloomberg News

Johnson Controls Rises on Forecast for 2012 Higher Sales, Profit

October 12, 2011

Oct. 12 (Bloomberg) -- Johnson Controls Inc., the largest U.S. auto supplier, rose as much as 6.6 percent after forecasting per-share profit and revenue growth for the 2012 fiscal year.

Johnson Controls rose 5.7 percent to $31.86 at 11:08 a.m. in New York after earlier reaching $32.13. The shares dropped 21 percent this year before today.

Profit in the year that ends Sept. 30, 2012, will be $2.85 a share to $3 a share, including 9 cents to fund pensions and consolidate a lithium-ion battery joint venture, a gain of as much as 23 percent from fiscal year 2011. The average estimate of 22 analysts surveyed by Bloomberg is for a profit of $3.11 a share, excluding the one-time items.

“The guidance of at least 20 percent earnings growth is much better than what is priced into the stock,” David Leiker, an analyst with Robert W. Baird & Co. in Milwaukee, said in an e-mail.

Sales will be about $44.2 billion, compared with $44.6 billion, the average estimate of 20 analysts, Johnson Controls said today before its investor day conference in New York.

Profit in the quarter that ended Sept. 30 increased to 75 cents a share, excluding some costs, compared with 60 cents a year earlier, Milwaukee-based Johnson Controls said today in a preliminary earnings statement. The average estimate of 21 analysts surveyed by Bloomberg was for a profit of 78 cents a share. Sales in the quarter were $10.7 billion, compared with an average estimate of $10.5 billion.

Improving Margins

The company said sales and margins will improve in its three business units, and it forecast higher auto production in North America and China, while Europe mostly will be unchanged.

Johnson Controls received 48 percent of its $34.3 billion in revenue in its fiscal 2010 from its auto parts unit, which makes seats and instrument panels. Johnson Controls also makes car batteries and systems to manage building climate and security. The company said it plans $1.7 billion in capital investments this year.

“The company’s long-term growth story is intact,” Chief Executive Officer Stephen Roell said in the statement.

Johnson Controls will release full fourth-quarter results Oct. 27.

--Editors: Bill Koenig, Jamie Butters

To contact the reporter on this story: Mark Clothier in Southfield, Michigan at mclothier@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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