Johnson Controls has reported fiscal 2013 second quarter net income of US$148m, which it says is line with expectations.
Net sales were US$10.4bn compared to US$10.6bn in Q2 2012, down 1%, while income from business segments was US$463m compared with US$581m a year ago, down 20%.
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Net income was US$287m versus US$378m in the second quarter of 2012.
“Our second quarter results were at the high end of our previous guidance,” said Johnson Controls, chairman and chief executive, Stephen Roell. “Building Efficiency posted earnings level with last year despite soft institutional and construction markets which negatively impacted revenues.
“Automotive Experience benefited from higher auto production in North America and Asia, but these improvements were more than offset by the low production levels as well as operational and restructuring-related costs in Europe.”
“We remain committed to improving profitability despite soft global demand in our markets. Our restructuring initiatives are gaining momentum and proceeding as planned. We expect to see significant benefits in the second half of the fiscal year.”
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By GlobalDataAutomotive Experience sales in the 2013 second quarter were US$5.4bn, down 3% compared to the 2012 second quarter, as higher revenue in North America was more than offset by lower sales in Europe. Automotive industry production in the quarter increased 1% in North America and declined 8% in Europe.
Seating and Interiors sales were down slightly, while electronics revenue dropped 13%. The electronics revenue decline was mainly the result of lower auto production rates in Europe where the company has a higher level of electronics content.
Revenues in China, which are primarily related to seating and generated through non-consolidated joint ventures, increased 31% to US$1.3bn.
Automotive Experience segment income was US$103m, significantly lower than the same quarter last year. The profitability of all three automotive segments was impacted by the low level of European production.
The company said the performance of its European and South American businesses improved sequentially. Seating segment income in the quarter was US$98m, down significantly compared to last year, primarily due to operational costs and lower European volumes.
Electronics segment income was US$24m, down 35% due to European volumes and higher research and development costs. The Interiors business reported a US$19m loss in the quarter mainly due to lower volumes in Europe.
Automotive Experience anticipates improved profitability in the second half of fiscal 2013, led by better operational performance in its European and South American businesses, as well as the benefits of its restructuring programme in Europe.
Power Solutions saw strong growth in revenue and earnings compared to the second quarter of 2012.
Sales increased 10% to US$1.6bn versus the same quarter last year. Stronger unit shipments in Asia and North America were partially offset by lower volumes in Europe.
Power Solutions segment income was $221m, 11% higher than the same quarter last year.
The company also completed the ramp-up of its recycling facility in South Carolina and says the construction of its second Chinese battery plant is proceeding on schedule.
“Despite a challenging global market, we anticipate stronger profitability in the second half of fiscal 2013 consistent with market expectations,” said Roell.
“Our second half results will reflect restructuring benefits and improved operating performance. We feel confident with our previously issued guidance for higher Johnson Controls earnings in 2013.”
