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For the third quarter of fiscal 2014, Johnson Controls, Inc., a global multi-industrial company, reported net income from continuing operations of $238 million, or $0.35 per share, on $10.8 billion in revenues.

Third quarter diluted earnings per share from continuing operations and excluding restructuring and non-recurring items was $0.84, up 17 percent versus $0.72 last year. As a result of the previously announced sale of its automotive electronics business, the company has classified electronics results as discontinued operations and prior year financial statements have been revised accordingly.

Excluding restructuring and non-recurring items in the third quarter, continuing operations highlights include:

  • Net revenues of $10.8 billion versus $10.5 billion in Q3 2013, up 3 percent;
  • Income from business segment operations of $794 million compared with $690 million a year ago, up 15 percent; and,
  • Diluted earnings per share of $0.84 versus $0.72 in the same quarter last year, up 17 percent.

Non-recurring items that impacted reported third quarter earnings from continuing operations include:

2014 third quarter (primarily related to business portfolio changes)

  • Pre-tax restructuring charges of $162 million primarily related to the Automotive Interiors business ($151 million after-tax); and,
  • Pre-tax losses from divested businesses and other transaction-related costs of $140 million ($174 million after-tax).

2013 third quarter

  • $140 million in non-recurring tax benefits; and,
  • Pre-tax restructuring charges of $143 million ($104 million after-tax).

Power Solutions sales in the fiscal third quarter of 2014 were $1.5 billion, up 6 percent versus the 2013 quarter. Excluding the impact of lead, sales increased eight percent. Global unit shipments increased 5 percent, with global production of AGM batteries for start-stop vehicles increasing 17 percent compared with the prior year. Power Solutions segment income was $193 million, up 43 percent, versus $135 million in the third quarter of 2013 due to improved product mix, higher volumes and operational efficiencies.

Johnson Controls said that in the 2014 third quarter, it was awarded new original equipment battery business in China for both traditional and AGM lead-acid batteries. Production is expected to launch in 2016. It also won new aftermarket business in the United States, Europe and Japan, totaling approximately 3 million units annually, with some of the incremental production to start later in the calendar year.

For the fourth quarter of 2014, the company provided earnings guidance from continuing operations of $1.00 to $1.02 per share, up approximately 11 percent versus the 2013 fourth quarter, excluding any transaction-related costs. The company also reaffirmed its full fiscal year guidance for free cash flow of $1.6 billion and segment margin improvements in all three of its businesses. The updated guidance assumes that underlying earnings from the recently announced Air Distribution Technologies acquisition are not material in the fourth quarter.

Published in the September 2014 Edition of American Recycler News