JCI profits fall on restructuring charges
Johnson Controls Inc.'s fiscal third-quarter earnings slid 68 percent as restructuring and other charges offset a modest rise in revenue.
For the quarter ended June 30, JCI posted a net profit of $176 million, or 26 cents a share, down from $550 million, or 80 cents a share, a year earlier.
The quarter's results included $162 million in restructuring charges related to the supplier's automotive interiors business and $140 million in losses from divested businesses and other transaction-related costs, JCI said today.
The results were generally in line with the expectations of analysts.
Revenue during the quarter rose 3 percent to $10.81 billion.
Excluding the charges and other items, JCI's earnings from continuing operations were 84 cents a share, up from 72 cents a year earlier.
Analysts expected earnings from continuing operations of 81 cents to 84 cents during the period, while analysts polled by Thomson Reuters forecast revenue of $10.8 billion.
Automotive revenues during the quarter increased 7 percent to $5.73 billion on higher light-vehicle output across all regions.
Revenue in the automotive business, JCI's largest, was driven mainly by China, which contributed about 32 percent of the division's third-quarter revenue, JCI said.
Automotive revenues in China, which are primarily related to seating and generated through non-consolidated joint ventures, increased 28 percent to $1.8 billion.
Automotive income from continuing operations rose 22 percent to $295 million, compared to $241 million in the third quarter of 2013. JCI said the increase in earnings reflected improved profitability in the company's seating and interiors businesses.
The company said automotive earnings were also helped by operational improvements in JCI's metals and mechanisms businesses, and in Europe, "which benefited from restructuring initiatives and higher revenues."
JCI, a manufacturer of car batteries and automotive seating, disclosed plans in May to spin off its automotive interiors business with a Chinese partner. JCI CEO Alex Molinaroli's wants to target higher-margin, non-auto businesses.
JCI will retain a 30 percent interest in the new interiors venture to be formed with Yanfeng Automotive Trim Systems Co. When the deal is final, the joint venture will become the world's largest producer of instrument clusters, door panels and other plastic and wood parts for automotive interiors.
In the third quarter, Shenyang Jinbei Johnson Controls Automotive, a Chinese joint venture, was awarded a $2.1 billion contract to provide seating for a luxury sedan under development by BMW Brilliance Automotive. Production is expected to launch in 2017, JCI said today.
During the quarter, JCI's building efficiency revenues slipped 4 percent to $3.58 billion, and power solutions sales rose 6 percent to $1.51 billion.Contact Automotive News