MILWAUKEE — For the second quarter of fiscal 2009, Johnson Controls reported net sales of $6.3 billion and a loss of $193 million, or 33 cents per diluted share. These results compare with net sales of $9.4 billion and income of $289 million, or 48 cents per diluted share, for the second quarter of 2008.

The second quarter 2009 results include restructuring charges of $230 million ($185 million net of tax), $81 million in non-recurring tax benefits and a $7 million tax benefit resulting from the increase in the first quarter effective tax rate from 24 percent to 31 percent. Excluding these items, the loss in the quarter was 16 cents per diluted share.

"As we indicated three months ago, the second fiscal quarter was going to be challenging due to the depressed automotive production volumes. During the quarter, we implemented additional cost reduction initiatives and actions to enhance our liquidity position," said Stephen Roell, Johnson Controls chairman and chief executive officer. "We started to see improvements in the financial performance of our Automotive Experience business toward the end of the second quarter, and we expect significantly lower operating losses in the third quarter. We believe the automotive improvement, combined with the solid profitability of our Building Efficiency and Power Solutions businesses, will enable us to report positive earnings for the remainder of 2009."

Power Solutions sales in the second quarter were $905 million, down 38 percent from $1.5 billion in the year ago period. Lower lead prices and currency translation negatively impacted revenues; overall unit volumes were 9 percent lower. Original equipment automotive battery volume was lower in both North America and Europe due to the decline in auto production levels, while aftermarket demand was comparable with last year.

Power Solutions segment income was $66 million in the second quarter, down 46 percent from $121 million last year. The company said the decline was due primarily to the lower unit volume, costs associated with footprint consolidations as well as increased investments for expansion in Asia and hybrid batteries.

In the second quarter, the company was awarded a contract to supply batteries in certain markets to Genuine Parts/NAPA, a new customer for Johnson Controls.

In addition, Johnson Controls announced it had received $149 million in incentives from the State of Michigan to build a lithium-ion hybrid battery manufacturing facility in Holland, Mich. This $220 million facility, with an initial capacity to build 15 million cells annually, would support the company’s lithium-ion production contracts with Ford, Azure Dynamics and other expected customers as the hybrid and electric vehicle industry continues to gain a foothold in the United States.

Automotive Experience sales in the quarter declined 47 percent to $2.4 billion versus $4.7 billion last year due to significantly lower production volumes globally. Automotive production in North America was down 51 percent versus a year ago to a level not seen in more than 40 years. European production declined 41 percent, although Johnson Controls said it is beginning to see positive volumes in certain countries where governments are providing incentives to consumers who scrap old cars and purchase new vehicles.

The Automotive Experience segment reported a loss of $275 million in the quarter versus a profit of $155 million in the 2008 period, due to the lower global volumes. Johnson Controls said it expected the Automotive Experience loss in the third fiscal quarter would be less than $50 million and affirmed that it forecast the business to achieve break-even results in the fourth fiscal quarter. These expected improvements are primarily the result of cost reduction initiatives and lower commodity costs.

The company said that the restructuring initiative announced in March 2009 is expected to be slightly accretive in 2009 and to provide approximately 15 cents per diluted share incremental benefit in 2010.

The restructuring program announced in September 2008 is approximately 70 percent complete and progressing ahead of schedule. It is expected that the financial benefits of this restructuring program will be increasingly accretive to earnings through the remainder of the 2009 fiscal year, and will provide a 20-25 cents per diluted share incremental benefit in 2010.

"We continue to invest in areas that support our growth strategies and are implementing strategies and disciplines to take advantage of the opportunities to gain share in our industries," Roell said. "While there are still many uncertainties in the global economy, we continue to believe we are positioned to report profitable financial results in the future."