MILWAUKEE -- For the second quarter of fiscal 2010, Johnson Controls reported a double-digit increase in sales with each of the company's businesses reporting higher profitability. The company also increased its estimate for 2010 earnings.

"We are pleased with our second quarter results," said Stephen Roell, Johnson Controls chairman and CEO. "Our automotive and power solutions businesses are executing very well on the higher production levels in North America and Europe. The Building Efficiency business has started to see signs of recovery with global orders increasing by 5 percent on a year-over-year basis. Globally our markets are improving, and each of the businesses generated significant margin improvements through our focus on cost and quality. I want to thank our employees for their dedication and commitment to our customers."

For the second quarter of 2010. the company reported net sales of $8.3 billion vs. $6.3 billion in the second quarter of 2009, up 32 percent. Income from business segments was $427 million compared with a second quarter 2009 loss of $119 million. Net income was $274 million vs. $193 million in the second quarter of 2009. Earnings per share increased from 33 cents to 40 cents year over year.

Automotive Experience sales in the quarter increased 70 percent to $4.2 billion versus $2.4 billion last year due primarily to higher production volumes and new program launches in all geographic regions. North American revenues increased 85 percent to $1.6 billion from $0.9 billion last year, while European sales were up 57 percent to $2.1 billion from $1.3 billion in the 2009 quarter. Sales in Asia increased to $430 million from $224 million in 2009 while China revenues, which are mostly generated through unconsolidated joint ventures, rose 91 percent. Johnson Controls has a 45 percent share of the Chinese automotive seating market.

Automotive Experience reported segment income of $189 million in the current quarter, compared with a loss of $269 million (excluding non-recurring items) last year due to higher volumes, operational efficiencies and significantly higher profitability of its automotive joint ventures. The North America segment margin of 6.7 percent reflects the benefits of our restructuring activities and increased production volumes. Asia segment margin, including the non-consolidated joint ventures in China, was also 6.7 percent. European segment margin was 2.4 percent, lower than other geographic regions due to the magnitude of new product launches.

Johnson Controls noted that automotive production levels continue to recover in both North America and Europe due to the continued replenishment of auto dealer inventories as well as increasing consumer demand. As a result, the company increased its forecasts for North American and European auto production in its 2010 fiscal year to 10.9 million units and 16.7 million units, respectively.

Johnson Controls has increased its earnings guidance for 2010. Net sales expectation increased to $33.5 billion (up 18 percent) versus previous guidance of $33 billion (up 16 percent), with the impact of higher automotive production partially offset by a revised Euro assumption of $1.35. Segment margins for Automotive Experience increased to 3.1 percent - 3.3 percent from 2 percent - 2.2 percent. Power Solutions margins increased to 12.6 percent - 12.8 percent, previously 11.8 percent – 12 percent. Earnings per share for the 2010 fiscal year are now expected to total $1.90 to $1.95 per diluted share compared to earlier guidance of $1.70 to $1.75 per diluted share. Capital expenditures increased to $750 million to $800 million from $700 million to $750 million related to accelerated growth investments in Power Solutions. Free cash flow increased by $100 million to $1.3 billion.

"We continue to be encouraged by the steady improvement in the automotive industry and therefore have increased our earnings outlook for 2010," Roell said. "In the first half of our fiscal year we have demonstrated the ability to capitalize on the higher production levels with strong execution occurring in all geographic regions. Strong cash flow from our operations has allowed us to accelerate our investments in growth initiatives across all of our businesses."