MILWAUKEE, Oct. 26 /PRNewswire-FirstCall/ -- Johnson Controls (NYSE:JCI - News) today reported double-digit increases in fiscal 2010 fourth quarter net sales and income.
Highlights for the company's fourth quarter of 2010 include:
• Net sales of $9.0 billion vs. $7.9 billion in Q4 2009, up 15%
• Income from business segments of $604 million compared with $409 million a year ago
• Net income of $449 million vs. $300 million in Q4 2009
• Diluted earnings per share of $0.66 vs. $0.47 last year
Excluding non-recurring items, results were
• Income from business segments of $586 million compared with $514 million a year ago
• Net income of $409 million vs. $339 million in Q4 2009
• Diluted earnings per share of $0.60 vs. $0.52 last year, up 15%
Both the 2010 and 2009 fourth quarters included non-recurring items that are detailed in the Footnotes of the accompanying financial statements. Johnson Controls said it believes that using the adjusted numbers provide a more meaningful comparison of its underlying operating performance.
"We continued to capitalize on the improvement in our markets in the fourth quarter while gaining share and expanding in key geographic markets. In addition, we continue to benefit from the growth investments we maintained through the economic downturn and from our improved cost structure," said Johnson Controls Chairman and CEO Steve Roell.
Business results (excluding items, see Footnotes)
Automotive Experience sales in the quarter increased 18% to $4.1 billion versus $3.5 billion last year due primarily to higher industry production volumes and new program launches. North American revenues increased 32% to $1.8 billion from $1.4 billion last year. North American industry production rose 27%. European sales were slightly lower than the 2009 quarter at $1.8 billion due to the negative impact of foreign currency. Excluding the impact of currency, European sales increased 8%. Sales in Asia increased 74% to $563 million from $323 million in 2009. China revenues, which are mostly generated through unconsolidated joint ventures and are not included in the Asia consolidated sales figures, rose 41% to $875 million compared with $621 million a year ago.
Johnson Controls announced that its backlog of net new business for 2011 – 2013 increased 60% to $4 billion, compared with a backlog of $2.5 billion for 2010 – 2012. The higher backlog reflects market share gains in seating and interior systems, particularly in Europe and China.
Automotive Experience segment income totaled $129 million in the current quarter, compared with $77 million last year due to higher volumes, operational efficiencies and higher profitability of its Chinese joint ventures. The company reported strong margin growth in North America and Asia. Margins were lower in Europe due to the negative impact of foreign currency and higher engineering costs.
Power Solutions sales in the fourth quarter of 2010 increased 19% to $1.3 billion from $1.1 billion last year reflecting higher aftermarket and original equipment unit shipments as well as the volumes associated with the consolidation of a Korean joint venture. Aftermarket unit shipments increased 12%. The increase was primarily due to incremental volume from Wal-Mart and growth in China where volumes were more than twice the prior year. Higher global automotive production resulted in a 19% increase in original equipment battery shipments worldwide.
Power Solutions segment income was $182 million versus an exceptionally strong $194 million in the fourth quarter of 2009. The year-ago quarter was favorably impacted by the magnitude and timing of lead purchases as well as product mix.
Johnson Controls said it started production at a new battery recycling facility in Mexico in October 2010 as planned and expects to be at full production by June 2011. In addition, the company said construction has begun on a new recycling facility in South Carolina. Upon completion of these facilities, Johnson Controls expects to be able to internally recycle more than 50% of its lead requirements versus 15% today.
Earlier this month, the company announced plans to further expand production capacity in China through the construction of a third manufacturing plant. The company also announced it had signed an agreement to form a joint venture to produce and sell lead acid batteries in the fast-developing emerging markets in Central and South America.
Building Efficiency sales in the 2010 fourth quarter were $3.6 billion, up 10% compared with last year reflecting increased demand for its energy efficiency solutions. Revenues were higher in all segments except Europe, which declined 12% due to the continued weakness in construction spending and deferrals of discretionary maintenance and retrofit projects. Johnson Controls reported that its fourth quarter backlog increased 10% to $4.7 billion. Orders increased by 32% globally, excluding currency.
In the fourth quarter, Verizon announced it selected Johnson Controls to provide integrated facility management, project management, energy implementation, lease administration and transaction management services at over 7,000 of Verizon's U.S. properties. During the quarter, the company also announced it had signed its single-largest order for York chillers and related HVAC equipment to be used in a retrofit project in the Middle East.
Building Efficiency reported segment income of $275 million, up 13% versus the 2009 quarter as a result of the higher volumes.
Johnson Controls said that due to the strength of its balance sheet, the company made a voluntary pension contribution of approximately $440 million in the fourth quarter. It also reported that its net debt to total capitalization ratio at the end of the quarter was 21.9%.
For the 2010 fiscal year, Johnson Controls sales increased 20% to $34.3 billion compared with $28.5 billion for 2009. Financial results for the 2010 fiscal year are included in the Consolidated Statements of Income.
Johnson Controls today affirmed the 2011 financial guidance it issued on October 12, 2010. Johnson Controls anticipates a sales increase of 9%, to approximately $37 billion. The 2011 expectations are the result of a global market recovery in its buildings business, modestly higher automotive production levels and growth across the businesses in emerging markets, as well as market share gains. Earnings are forecast to increase to approximately $2.30 - $2.45 per diluted share. Sales, earnings and margin improvements are expected in all three of its businesses in 2011.
"We have good momentum as we begin fiscal 2011 as evidenced by our strong financial performance in the fourth quarter of 2010 and the substantial increases in our automotive and buildings backlogs. Our objective is to consistently grow at twice the rate of our underlying markets," Mr. Roell said. "With our strong balance sheet and cash flows, we are accelerating our investments ahead of the recoveries of our markets to take advantage of growth opportunities and to further grow our share. I believe Johnson Controls is well-positioned to deliver record earnings in 2011 and sustainable, profitable growth over the long-term."
Johnson Controls, Inc. has made forward-looking statements in this document pertaining to its financial results for fiscal 2011 and beyond that are based on preliminary data and are subject to risks and uncertainties. All statements, other than statements of historical fact, are statements that are, or could be, deemed "forward-looking" statements and include terms such as "outlook," "expectations," "estimates" or "forecasts." For those statements, the Company cautions that numerous important factors, such as automotive vehicle production levels, mix and schedules, energy and commodity prices, the strength of the U.S. or other economies, currency exchange rates, cancellation of or changes to commercial contracts, changes in the levels or timing of investments in commercial buildings as well as other factors discussed in Item 1A of Part I of the Company's most recent Form 10-k filing (filed November 24, 2009) could affect the Company's actual results and could cause its actual consolidated results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, the Company.
Johnson Controls is a global diversified technology and industrial leader serving customers in over 150 countries. Our 130,000 employees create quality products, services and solutions to optimize energy and operational efficiencies of buildings; lead-acid automotive batteries and advanced batteries for hybrid and electric vehicles; and interior systems for automobiles. Our commitment to sustainability dates back to our roots in 1885, with the invention of the first electric room thermostat. Through our growth strategies and by increasing market share we are committed to delivering value to shareholders and making our customers successful.