Johnson Controls first quarter fiscal 2013 net income of $354m, or $0.52 a share, was down from $424m, or $0.62 in previous year. Sales were flat at $10.4bn.

Income from business segments was down 13% to $541m from $621m.

“Our first quarter results were in-line with the expectations we announced during our earnings release last October. Global demand in our markets was softer than a year ago, but we benefited from the strong backlog of business we had entering the fiscal year,” said chairman and CEO Stephen Roell.

“European demand continued to soften and we began restructuring initiatives in the third and fourth quarters of fiscal 2012 to improve our performance in the region. We expect to realise the benefits of those actions in the second half of the year.”

Automotive Experience [interiors, seats, electronics] revenues were $5.2bn, comparable to the 2012 quarter, as higher automotive production in North America and Asia was offset by lower production in Europe. Automotive industry production in the quarter increased 11% in North America and 3% in Asia versus a decline of 9% in Europe.

Seating and interiors sales were equal to last year while electronics revenues declined due to lower auto production rates in Europe where the company has a higher level of that content.

Revenues in China, which are primarily related to seating and generated through non-consolidated joint ventures, increased 21% to $1.4bn.

Automotive Experience segment income plunged 50% to $101m as improvements in North America were more than offset by higher engineering and product development costs, the impact of lower volumes in Europe, as well as operational inefficiencies the company is taking steps to address. Profitability improved in the interiors segment as a result of cost reductions.

Power Solutions [batteries] sales in the first quarter of 2013 increased 4% to $1.7bn led by a double-digit increase in unit shipments in Asia as well as higher demand in Europe. Original equipment battery shipments in North America were higher  while aftermarket unit shipments were lower. Segment income was down 3% to $268m.

2013 outlook

“Uncertainties remain in our global markets, and we expect earnings in the first half of fiscal 2013 to be significantly lower than 2012, consistent with our earlier forecast. We continue to have confidence in our full-year guidance for higher revenues and earnings in fiscal 2013,” said Roell.

Johnson Controls expects earnings per share of $0.40 – $0.42 in the second quarter. The forecast reflects the current European automotive production environment and short-term delays in flexing labor in the region as well as a high level of launch activity. The company reaffirmed its guidance for the full fiscal year.