Johnson Controls says quarterly profit rose 30 percent

DETROIT (Reuters) -- Supplier Johnson Controls Inc. said today its quarterly net profit rose 30 percent on sales gains, particularly in China.

Net profit for the first fiscal quarter was $469 million, 69 cents per share, up from $359 million, or 52 cents per share, a year ago.

Revenue rose 5 percent to $10.91 billion, beating expectations of analysts polled by Thomson Reuters I/B/E/S of $10.73 billion.

"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," CEO Alex Molinaroli said in the company's statement.

Johnson Controls makes car interiors, seating systems, and batteries as well as heating, ventilation and cooling systems for buildings.

A larger part of JCI's total revenue came from its automotive segment, where a rise in global auto sales helped boost revenue 10 percent from a year ago to $5.76 billion. Auto industry production rose 10 percent in North America, 2 percent in Europe and 14 percent in China, JCI said.

Automotive revenue in China, which is centered on seating and generated through non-consolidated joint ventures, rose 33 percent in the quarter to $1.9 billion. Income from its automotive business rose 130 percent to $232 million, JCI said.

Earlier this month, JCI sold its automotive electronics business to Visteon Corp for $265 million in cash.

JCI's battery sales increased 6 percent to $1.77 billion, and raised income by 12 percent to $308 million.

The company forecast profit between $3.15 and $3.30 per share for 2014 with free cash flow of $1.6 billion. A month ago, the company issued a forecast that disappointed Wall Street, which had expected 2014 earnings of $3.31 per share.

JCI said expects its fiscal second quarter earnings of 64 to 66 cents per share, while Thomson Reuters I/B/E/S poll of analysts shows expectations of 67 cents per share.

In the fiscal first quarter, JCI increased its quarterly dividend by 16 percent and completed $1.2 billion in share repurchases.

Analyst Christian Mayes of Edward Jones said that the company exited the automotive electronics business, which increased sales by 7 percent in the quarter, because it does not want to invest heavily to keep up with new technology in automotive connectivity.

"JCI wants to lower capital spending to enable more share buybacks and higher dividends," said Mayes. "They will pay more dividends and share repurchases in the next three years than they are going to bring in free cash flow. So they don't want to be spending a lot on capital expenditure."



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