Johnson Controls booked a 21% increase in third quarter revenues with double-digit sales increases in each of its three businesses, two of which are auto-related. Income was up 9% to US$512m while net income was up 4% to $357m. Earnings per share were $0.52.
Excluding one-time items, JCI earned 56 cents a share, 2 cents better than the average analyst estimate as polled by Thomson Reuters I/B/E/S. Sales were up 21% to US$10.4bn, above the $9.55bn the analysts had expected.
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JCI said Q3 2011 result included non-recurring pre-tax charges of $29m, or $0.04 per share, associated with recent acquisitions and related costs. Q3 2010 included a non-cash tax benefit of $51m, or $0.07 per share.
The company said sales in the 2011 quarter were negatively impacted by approximately $400m due to disruptions in automotive production resulting from the March earthquake in Japan.
“These record revenues mark our seventh consecutive quarter of double-digit growth. All of our businesses are continuing to grow faster than their underlying industries as a result of share gains and our strong position in the emerging markets,” said chairman and CEO Stephen Roell.
“Automotive Experience [essentially interiors – ed] in particular exceeded the expectations set as we entered the third quarter due to faster than expected market recovery following the Japan earthquake and higher production levels in some markets.”
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By GlobalDataAutomotive interior sales in the quarter increased 21% to $5.1bn versus $4.2bn last year due primarily to higher production volumes, new programme launches and incremental sales from recent acquisitions. Higher global volumes were partially offset by lower production by Japanese automakers due to earthquake disruptions.
North American revenues increased to $1.8bn from $1.7bn last year as the significant reduction in domestic vehicle production by Japanese customers offset higher sales to other automakers. European sales were up 38% to $2.8bn from $2.0bn due to higher production levels, the launch of new seating and interiors programmess and incremental sales from acquisitions.
Sales in Asia increased 24% to $546m from $440m in 2010. China revenues, which are mostly generated through unconsolidated joint ventures, rose 20% to $936m compared with $780m a year ago. Johnson Controls claims a 45% share of the Chinese automotive seating market and is launching multiple new interiors programmes there over the next three years.
The interiors business booked income of $171m in the current quarter, comparable with the prior year quarter. Asia income doubled versus last year to $51m, as growth in China and Korea more than offset the production disruptions. Europe income increased 8% to $53m, compared with $49m last year, as the company continued efficiency improvements.
Power Solutions [batteries] sales in the third quarter of 2011 increased 22% to $1.4bn from $1.1bn last year reflecting higher volumes in Asia, the incremental volume associated with the consolidation of its Korean joint venture at the end of last year and higher lead prices. Aftermarket unit shipments increased 10%. Higher global automotive production and market share gains resulted in an 8% increase in original equipment battery shipments.
Segment income was up 21% to $163m versus $135m in the third quarter of 2010 due mainly to higher volumes.
JCI said it expected to earn $0.75 per share in the fourth fiscal quarter.
“We remain on track to generate record sales and earnings in 2011. We expect to see higher European automotive margins in our fourth quarter as the recent acquisitions become more accretive and as operational efficiencies improve,” added Roell.
