Johnson Controls Q1 Profit Up 31%, Revenues Beat View; Reiterates 2014 Outlook

(RTTNews) - Auto parts supplier Johnson Controls, Inc. (JCI) on Thursday reported a 31 percent increase in profit for the first quarter from last year, aided by higher revenues at the company's automotive experience and power solutions segments. The company's results benefited from higher levels of global automotive production.

Earnings per share for the quarter matched analysts' expectations, while revenues beat their estimates. Looking ahead, Johnson Controls forecast earnings per share for the second quarter below Street estimates, but reaffirmed its earnings outlook for fiscal 2014.

Alex Molinaroli, chief executive officer of the company said, "The significant improvement in profitability resulted from our focus on execution and cost discipline. We also benefitted from the higher levels of global automotive production."

For the first quarter, net income attributable to the Milwaukee, Wisconsin-based company was $469 million or $0.69 per share, up from $359 million or $0.52 per share in the year-ago period.

On average, ten analysts polled by Thomson Reuters expected the company to report earnings per share of $0.69 for the quarter. Analysts' estimates typically exclude one-time items.

Net sales for the quarter grew 5 percent to $10.91 billion from $10.42 billion in the same quarter last year and beat analysts' consensus estimate of $10.73 billion.

Income from business segments for the quarter rose 25 percent to $686 million from $549 million in the prior-year quarter.

Segment-wise, building efficiency net sales for the quarter declined 4 percent from last year to $3.38 billion, as higher revenues in Asia were more than offset by lower demand in Europe, the Middle East and Latin America as well as Global Workplace Solutions. Segment income decreased 15 percent to $146 million and includes contract-related charges of about $20 million.

However, Johnson Controls noted that there were early indications of improving global commercial buildings markets, which should positively impact the business later in the year.

Power solutions segment sales for the quarter increased 6 percent to $1.77 billion and segment income rose 12 percent to $308 million.

Automotive Experience segment sales rose 10 percent from the year-ago period to $5.76 billion, reflecting higher automotive production in all geographic regions. Segment income more than doubled from last year to $232 million.

In January 2014, Johnson Controls agreed to sell its Automotive Experience Electronics business to Visteon Corp. (VC) for $265 million. Johnson Controls has also launched a strategic review of its Automotive Interiors business.

Looking ahead to the second quarter, Johnson Controls forecast earnings in a range of $0.64 to $0.66 per share. Analysts expect the company to report earnings of $0.67 per share for the quarter.

For fiscal 2014, the company reaffirmed its outlook for earnings in a range of $3.15 to $3.30 per share, free cash flow of $1.6 billion, and segment margin improvements in all three of its businesses. Street expects the company to earn $3.27 per share for the year.

JCI closed Wednesday's trading at $51.56, up $0.01 or 0.02 percent on a volume of 6.01 million shares. In Thursday's pre-market, the stock is down $0.05 or 0.10 percent to $51.51.