Johnson Controls on Monday reported that its fourth quarter 2005 earnings from continuing operations rose 15% on a sales increase of 7%.
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Sales for the 2005 fourth quarter totaled $6.9 billion, up 7% from $6.4 billion last year. Operating income was $436 million, up 14% from $384 million last year though operating income in the automotive interiors business declined.
Income from continuing operations totaled $293 million, up 15% from $255 million in the 2004 period. Earnings per share from continuing operations for the 2005 fourth quarter were $1.50 versus $1.31 in the prior year.
During the fourth quarter, the company recorded an $8.7 million adjustment, net of tax, reducing the gain on sale of discontinued operations in the second quarter of 2005. Including this one-time reduction, diluted earnings per share were $1.45, up from $1.41.
Vehicle interior sales were $4.5 billion, up 4% from the $4.4 billion in the prior year. The increase was associated with the launch of new business which was partially offset by the deconsolidation of a North American joint venture during the third quarter of 2005.
Industry light vehicle production in North America is estimated to have been approximately 3% higher than the prior year amount while European production is estimated to have been 2-3% lower.
Operating income declined 13%, to $206 million versus $238 million for the 2004 fourth quarter, primarily due to higher commodity costs which more than offset the benefit of operational improvements.
Fiscal 2006 sales are anticipated to increase approximately 15%, to $32 billion. Earnings per share from continuing operations are estimated to increase 13 to 17%, to a range of $5.00 to $5.15. For the first quarter of 2006, Johnson Controls anticipates sales of $6.8 billion and earnings per share from continuing operations of $0.82 to $0.85.
