Johnson Controls Inc.
) has fully acquired the India-based Tata Johnson Controls (TJC),
formerly a 50:50 joint venture between the company and Tata
Automotive Components. TJC is a leading supplier of automotive
seating and components to major original equipment manufacturers
(OEMs) in India. Both the parties have not disclosed terms of the
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TJC operates from 11 locations in India that includes an
engineering center in Pune and a new Technical Center in Pimpri.
It employs 2,100 people. After the acquisition, Johnson Controls
plans to expand its prototype and testing capability in India.
Johnson Controls has been operating in India since 1995.
According to Paul Chawla, president and chief executive of
Johnson Controls' Indian automotive seating and interiors
operations, India is considered a part of Johnson Controls'
global strategy for sustainable growth.
As a result, expanding in emerging markets is a key priority for
the company. According to market research firm IHS, more than
half of global production of cars and light trucks is expected to
take place in China, India, Russia and Brazil by 2017.
Johnson Controls posted a 23.6% decline in adjusted earnings to
42 cents per share in the second quarter of fiscal 2013 ended Mar
31, 2013 from 55 cents in the same quarter of prior fiscal year,
but earnings were in line with the Zacks Consensus Estimate. Net
income declined 24.1% to $287.0 million from $378.0 million in
the second quarter of fiscal 2012.
Revenues in the quarter declined 1.3% $10.43 billion but
marginally exceeded the Zacks Consensus Estimate of $10.39
billion. The decline was attributable to lower revenues in the
company's Automotive Experience and Building Efficiency segments.
Johnson Controls reiterated its guidance to generate earnings
between $2.60 and $2.70 per share in fiscal 2013, which is higher
than $2.56 in fiscal 2012. For the third quarter of fiscal 2013,
the company expects earnings per share of 75 cents.
The company also expects that it will record better performance
in the second half of 2013 due to benefits from restructuring
initiatives, higher profitability from Building Efficiency
segment and improvements in European and South American
Automotive Experience businesses. It also expects Power Solutions
business to record higher profitability in the second half of
Following the impressive guidance, shares of the company started
escalating. On May 28, shares of the company reached 52-week high
Currently, shares of Johnson Controls retain a Zacks Rank #3,
which translates to a short-term rating (1-3 months) of Hold.
Some other stocks that are performing well in the broader
industry where Johnson Controls operates include
STRATTEC Security Corporation
Tower International, Inc.
). All these companies carry a Zacks Rank #1 (Strong Buy).