MILWAUKEE – For the first quarter of fiscal 2012, Johnson Controls has reported record revenues and earnings.
 
Highlights of the company's first quarter of 2012 include:
 
·      Record net sales of $10.4 billion vs. $9.5 billion in the first quarter of 2011, up 9 percent.
 
·      Record income from business segments of $598 million vs. $533 million, up 12 percent.
 
·      Record net income of $410 million, or 60 cents per diluted share, compared with net income of $375 million, or 55 cents per diluted share, in the 2011 first quarter
 
"Our first quarter results were in line with the expectations we announced at the beginning of the year. The automotive and buildings markets were stable in the quarter, and we benefitted from our record backlogs in both businesses," said Stephen Roell, Johnson Controls chairman and CEO. "Automotive Experience revenues grew at a double-digit pace across all geographic regions, and Building Efficiency commercial revenues and backlog were higher in a challenged global market. Power Solutions improved sales and income despite the soft demand for aftermarket batteries resulting from unseasonably warm winter temperatures globally."
 
Roell added, "Our growth in the first quarter is evidence of continued market share gains as we sustainably outperform our underlying industries. We took steps to improve our execution and added resources to improve quality and productivity. At the same time, we continued to invest in order to support our global growth and margin expansion opportunities."
 
Automotive Experience sales in the 2012 quarter increased 15 percent to $5.3 billion, versus $4.6 billion last year due primarily to the incremental revenues associated with the 2011 acquisitions as well as launches of new automotive seating and interior programs. Revenues increased 15 percent in each geographic market. Automotive industry production in the quarter increased 16 percent in North America, declined 4 percent in Europe and was level with the 2011 period in Asia. Revenues in China, which are mostly generated through non-consolidated joint ventures, increased 10 percent to $1.1 billion. Johnson Controls has 28 joint ventures in China operating 47 manufacturing plants. It holds a 45 percent share of the Chinese auto seating market.
 
Automotive Experience reported segment income of $194 million in the current quarter, up 10 percent due to significant increases in Europe and Asia. European segment income benefitted from the positive impact of the 2011 acquisitions, improving to $21 million versus break-even performance last year. In Asia, the higher profitability of the company's joint ventures resulted in a segment income increase of 69 percent to $103 million, compared to $61 million last year.
 
As previously indicated, North America first quarter earnings were negatively impacted by costs associated with a new metals plant as well as higher engineering and launch costs associated with new business wins.

The company has increased resources dedicated to improving its launch efficiencies and quality, including adding management capacity in its automotive metals business and the hiring of more than 300 Six Sigma Blackbelts and quality experts. Johnson Controls said it believes these actions will make an increasingly positive impact on earnings starting in the second half of fiscal 2012.
 
Power Solutions segment income was $271 million, up 25 percent versus $217 million in the first quarter of 2011 as a result of a favorable product mix, the benefits of increased vertical integration and a non-recurring equity income benefit. The increases were partially offset by costs associated with the shutdown of the company's Shanghai battery plant and the incremental costs associated with the consolidation of its hybrid battery joint venture.

Johnson Controls said that the construction of its recycling facility in South Carolina and of its third Chinese battery plant are proceeding on schedule. Demand continues to grow as expected for the company's higher-margin AGM lead-acid batteries, and plans to increase capacity are progressing as expected.
 
Revised sales, earnings guidance for 2012
Johnson Controls is lowering its earnings expectations for fiscal 2012 to due to several factors:
 
* Euro assumption lowered to $1.30 from original forecast of $1.35
* Lower automotive production in Europe (now 19.6 million units, down 3.5 percent versus original assumption of 20.1 million, up 1.5 percent)
* Weather-related softness in second quarter aftermarket battery demand
* Assumes indefinite shut-down of Shanghai, China battery plant (discussions with the Chinese government are continuing)
* Automotive North America metals start-up costs impact extending into second quarter
* Lower residential HVAC demand
 
As a result of these changes, the company said it believes its second quarter 2012 earnings will be approximately 52 cents to 54 cents. For the full year, the earnings expectation is revised to a range of $2.70 - $2.85 (up 13 percent to 19 percent) versus earlier guidance of $2.85 - $3.
 
Johnson Controls said it was confident in its second half of 2012 outlook, noting that 2011 second half earnings were significantly impacted by the Japan tsunami-related automotive disruption. In addition, the company's second half 2012 earnings will benefit from the full-year impact of the automotive acquisitions, cost reduction initiatives and investments in Power Solutions.
 
"While there are some short-term changes to our original 2012 expectations, our primary growth and profitability story is intact," said Roell. "We believe actions we have taken to improve our execution and profitability will provide momentum through the balance of the year and beyond. Despite the near-term challenges, we believe Johnson Controls will deliver double-digit earnings increases in 2012."