MILWAUKEE – For the second quarter of fiscal 2014, Johnson Controls has reported net income of $261 million, or 39 cents per share, on $10.5 billion in revenues. Second quarter earnings per share (including discontinued operations and excluding non-recurring items) was 66 cents, which is at the high end of the company’s previously issued guidance and up 50 percent versus 44 cents last year. As a result of the previously announced sale of its Automotive Electronics business, the company has reclassified Electronics’ results to discontinued operations and prior year financial statements have been revised accordingly.
"While the economic environment continues to challenge top line growth in some of our businesses, I am pleased with the profitability improvements in all businesses" said Alex Molinaroli, Johnson Controls chairman and CEO. "These results are consistent with the expectations we disclosed during our first quarter earnings call."
Automotive Experience revenues (excluding discontinued operations) in the fiscal second quarter of 2014 were $5.6 billion, up 11 percent compared to the 2013 quarter, reflecting higher automotive production in all geographic regions. Automotive industry production in the quarter increased 5 percent in North America, 5 percent in Europe and 9 percent in China. Revenues in China, which are primarily related to Seating and generated through non-consolidated joint ventures, increased 25 percent to $1.6 billion.
Automotive Experience segment income (excluding discontinued operations) of $241 million was up 226 percent compared to $74 million in the second quarter of 2013. The 2013 results exclude an $82 million non-recurring equity income gain. JCI said the increase was primarily led by improvements in the company’s Seating business, with segment income of $236 million in the current quarter, compared with $94 million last year. The Interiors business showed a profit of $5 million this year compared with a $20 million loss last year. Automotive Experience improvement was a result of improved operational performance in the Company’s metals and mechanisms business and Europe, benefits from restructuring initiatives and higher revenues.
Portfolio Update
On April 16, Johnson Controls announced a definitive agreement to purchase Air Distribution Technologies, one of the strongest and largest independent providers of air distribution and ventilation products in North America, for $1.6 billion. The transaction, which is forecast to close in July 2014 subject to required regulatory approvals, is expected to significantly expand Johnson Controls’ third party distribution channels and create cross-selling opportunities for existing and new products.
The Company said it believes it is on target to close the sale of its Automotive Electronics business by the end of its 2014 fiscal year and that the review of strategic options for its Automotive Interiors business is continuing.
"While we have made significant progress on the changes to our portfolio, our priority remains operational excellence to drive continued increases in profitability and shareholder value. Our first half results demonstrate the success of our employees’ efforts and I thank them for their dedication to our customers and shareholders," said Molinaroli.
