CHICAGO -- Johnson Controls Inc. said on Tuesday it expects double-digit earnings growth in fiscal 2006 and 2007, in stark contrast with its struggling peers in the auto parts industry.
The company also said it has signed a memorandum of understanding with Saft for a joint venture to produce batteries for the hybrid and electric vehicle markets. It expects to complete the agreement in early 2006.
Earnings per share are expected to rise 13 percent to 17 percent, to a range from $5 to $5.15 in fiscal 2006, and sales to rise about 14 percent to $32 billion, said Milwaukee-based Johnson Controls, which makes seats and interiors, car batteries and building ventilation controls.
Analysts, on average, expect earnings of $5.02 per share on revenue of $30.66 billion for fiscal 2006, which started on Oct. 1, according to Reuters Estimates.
The report of steady growth contrasts with auto parts maker Delphi Corp.'s bankruptcy filing on Saturday, Oct. 8., and auto and truck parts maker Dana Corp.'s warning on Monday, Oct. 10, that it will be forced to restate results.
The joint venture with Saft will develop, manufacture and sell nickel-metal-hydride batteries, the type now used in hybrid vehicles powered by gasoline engines and electric motors, and the next generation of lithium-ion batteries, Johnson Controls said.
Saft designs and manufactures advanced batteries for high performance applications such as industrial infrastructure and processes, transportation, space and defense.
Saft and Johnson Controls will combine development teams within existing locations and invest in state-of-the-art manufacturing facilities to match demand, the company said. Johnson Controls in September unveiled a laboratory at its headquarters to develop lithium-ion batteries.
Johnson Controls' outlook excludes discontinued operations, restructuring costs, tax credits and pension gains.
The company expects first quarter earnings per share of 82 cents to 85 cents, up from 75 cents a year earlier, with sales of about $6.8 billion. Analysts expect earnings per share of 76 cents with sales of $7.23 billion.
It also expects earnings per share growth of 15 percent to 20 percent in fiscal 2007 over 2006. Analysts expect earnings per share of $5.60 for 2007.
Johnson Controls expects fiscal 2005 earnings per share of $4.39 to $4.43 with sales up about 10 percent to about $28 billion when it reports results on Oct. 24. Analysts expect earnings per share of $4.47 and revenue of $27.94 billion.