Johnson Controls on Thursday reported that for the first quarter of fiscal 2003 diluted earnings per share increased 17% to $1.48 from $1.27 for the first quarter of fiscal 2002; and sales increased 8% to $5.2 billion from $4.8 billion last year.
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For the three months ended December 31, 2002, operating income increased 4% to $247.9 million compared with $238.5 million for the prior year. Income before income taxes and minority interests rose 8% primarily because of the higher operating income and an increase in equity income. Net income increased 17% to $140.4 million from $119.9 million for the first quarter of 2002 aided by, as previously forecast, a decline in the effective income tax rate to 31.0% from 35.9%.
Selling, general and administrative expenses were 15% higher as a result of increased automotive engineering expenditures in Europe, the effect of foreign currency translation, and the inclusion of the automotive battery business of Varta, which was acquired October 31, 2002.
“Miscellaneous-net” expense of $2.4 million was slightly lower than the prior year due to a pretax gain of $16.6 million associated with the conversion of the company’s investment in shares of Donnelly Corp. into Magna International shares and the subsequent sale of those shares. Non-operating legal and environmental provisions were increased in the current quarter.
Total debt to total capitalisation increased to 40% from 36% at September 30, 2002 as a result of the battery acquisition.
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By GlobalDataAutomotive Systems Group sales for the first quarter of fiscal 2003 increased 8% over the prior year. The increase was due to higher revenues in Europe while sales in other world regions were comparable to the prior year.
North American sales of interior systems and batteries were about level with last year. Interiors sales were slightly lower than the year ago amount primarily due to the deconsolidation of a seating joint venture six months ago. Domestic sales of automotive batteries increased due to higher unit shipments to virtually all customers.
Automotive group sales in Europe were 25% higher than in the prior year. The increase was due to revenues associated with the acquired battery business, favorable currency translation and slightly higher sales of interior systems. Excluding the effect of the strengthened Euro, sales rose 12%. Johnson Controls automotive sales in Asia, including Japan, and South America were comparable to the prior year.
Operating income for the Automotive Systems Group increased 3% from the prior year reflecting improved results in North America and Asia. Operating margin declined primarily due to higher engineering spending and increased new programme launch costs in Europe.
