Johnson Controls Inc.
) 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.
Revenues from the
segment slid 3% to $5.4 billion due to lower sales in Europe,
which more than offset the higher revenues from North America.
Automotive production in North America improved 1% and decreased
8% in Europe. However, segment income plunged to $103.0 million
from $243 million, due to lower production volume in Europe.
Revenues from the
segment declined 3% to $3.5 billion, owing to soft global demand,
which adversely affected sales and orders. North America Systems
reported higher sales, which were offset by lower revenues from
Europe, Asia and North America Service. However, segment income
went up marginally to $139.0 million from $138.0 million, driven
by improved labor productivity, reduced costs and implementation
of new pricing programs.
Revenues from the
segment rose 10% to $1.6 billion driven by higher unit shipments
in Asia and North America, partially offset by lower volumes in
Europe. Segment income improved 10.9% to $221.0 million in the
quarter under review from $200.0 million year ago.
Johnson Controls had cash and cash equivalents of $481.0 million
as of Mar 31, 2012 compared with $240.0 million as of Mar 31,
2011. Total debt increased to $6.7 billion as of Mar 31, 2012
translating into a debt-to-capitalization ratio of 36.1% compared
with $6.3 billion and a debt-to-capitalization ratio of 35.3% as
of Mar 31, 2011.
In the first six months of fiscal 2013, Johnson Controls had a
higher cash flow of $515.0 million compared with $146.0 million
in the year-ago period. Meanwhile, capital expenditures decreased
to $664.0 million from $986.0 million in the prior year.
During the quarter, Johnson Controls completed the ramp-up of
recycling facility in South Carolina. The company is also
planning for a second battery plant in China.
Johnson Controls reiterate its guidance to generate earnings
between $2.60 and $2.70 per share in fiscal 2013. For the third
quarter of fiscal 2013, the company expects earnings per share of
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 its Building
Efficiency segment and improvements in European and South
American Automotive Experience buisnesses. It also expects Power
Solutions business to record higher profitability in the second
half of fiscal 2013.
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Johnson Controls is a supplier of automotive interiors,
batteries, and other control equipment. Currently, the company
retains 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 industry where
Johnson Controls operates include
Tower International, Inc.
). All these companies carry a Zacks Rank #1 (Strong Buy).