Johnson Controls has reported net income up 2% on a sales rise of 11% for the first quarter of fiscal 2005 and also confirmed its previous outlook for the full year.
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For the three months ended December 31, 2004, sales increased 11% to $7.0 billion from $6.3 billion last year, reflecting growth by both the automotive and controls businesses. The effect of foreign currency translation added approximately $240 million to sales in the current quarter.
As projected by the company in October 2004, operating income declined from the record level a year ago to $US245.4 million, 3% below the prior year’s $253.8 million.
Income from continuing operations increased to $160.5 million ($.83 per share) compared with $159.2 million ($.83 per share) for the prior year. Net income increased 2% to $168.4 million ($.87 per share) from $164.5 million ($.86 per share) reported for the first quarter of 2004.
Automotive Group sales for the first quarter of fiscal 2005 increased 11% over the prior year primarily due to new interior systems business, the benefit of foreign currency translation, and higher battery sales. Industry vehicle production was down 2.4% in North America and is estimated to be down 2% from the prior year in Europe. While operating income increased 2% from the prior year, operating margin declined as price reductions and higher raw material costs outweighed the benefits of the higher volume and operational improvements.
Johnson Controls confirmed its outlook for the full year of 2005, including sales growth of 8-10% and double-digit increases in operating and net income.
“Uncertainties continue in the automotive industry both with respect to vehicle sales and production schedules, as well as with markedly higher raw material costs,” the company said in a statement.
