20 Apr Johnson Controls weathers auto market and increases sales
Milwaukee — Johnson Controls Inc., which makes auto parts and facility-control systems, reported $203 million net income for the quarter ended March 31, on sales of $7.1 billion.
That’s up from $158 million net on $6.3 billion in sales for the same quarter a year ago.
“We have faced unprecedented challenges in recent months in the automotive industry and as a result, have accelerated actions to help ensure our company’s competitiveness,” CEO John M. Barth said.
During the quarter the company completed the sale of its engine electronics business and its world-services subsidiary. Johnson Controls also recorded a pre-tax restructuring charge of $210 million, reflecting an acceleration of the company’s cost-reduction strategies, primarily relating to severance costs and facility consolidations.
Despite the general downturn in the automotive market, the company’s Automotive Group sales in the quarter increased 14 percent to $5.7 billion from $5 billion, reflecting higher interiors and battery volumes and the benefit of foreign currency translation.
Controls Group sales to the nonresidential buildings market rose 9 percent to $1.4 billion from $1.3 billion for the quarter last year. The increase was primarily due to stronger system installation, technical services and facility management revenues in North America, as well as the benefit of foreign currency translation.
During the quarter, Johnson Controls also signed a letter of intent to acquire Delphi Corp.’s global automotive battery business for $212.5 million, subject to adjustments. The acquisition is expected to close, subject to regulatory approvals, in the summer of this year and is not expected to have a material impact on fiscal 2005 results.