Johnson Controls Inc. (JCI) said Monday that its auto-parts unit would return to profit in the current fiscal fourth quarter, but added that the global construction market remains soft.

The U.S. group is split between auto parts and systems for the commercial and residential building markets, and the company forecast improvements across all three during the three months ending Sept. 30.

The company on Monday beat expectations for its third quarter, as restructuring efforts helped counter a 31% fall in auto revenue.

"We expect to see our revenues tick up in the fourth quarter and bring us to about $7.4 billion," Chief Financial Officer Bruce McDonald said on a conference call.

The company has shrunk its auto segment to reflect falling global production rates, and the business was profitable in Europe and Asia during the latest quarter.

North American production is expected to be higher in the second half of the year, flipping the traditional pattern, following an extended period of plant shutdowns.

McDonald said the global construction market remain soft, especially in areas such as Latin America where discounting is pushing down pricing. Its building group backlog in Europe and the Middle East fell by double-digit percentages during the third quarter.

The total order backlog is expected to be down year-on-year at the end of the fourth quarter, though it expects a nonrecurring tax benefit of up to $125 million.

Johnson Controls shares were recently up 5.8% at $22.77.

Johnson Controls is bidding on hundreds of stimulus-related projects it values at up to $800 million, though the benefits are not expected until later next year.

"We expect that in this quarter, as well as the first half of 2010, this will be largely a period where we'll win awards," said Chairman and Chief Executive Steve Roell. "We would expect to execute and get revenue in late 2010."

For the three months to June 30, Johnson Controls reported a profit of $163 million, or 26 cents a share, down from $439 million, or 73 cents a share, a year earlier. Sales dropped 29% to $7 billion.

The auto unit swung to a small loss as sales tumbled 38%, with North American auto-industry production down 48% amid shutdowns at General Motors Co. and Chrysler Group LLC. Chrysler shut its factories for almost two months in May and June. European output fell 27%.

Roell said the company has been paid by Chrysler on the amount due for product shipments during the bankruptcy process.

"While we still have a few items to reconcile with General Motors that the customers paid us for the majority of the amounts outstanding," Roell said.

-By Jeff Bennett, Dow Jones Newswires; 248-204-5542; jeff.bennett@dowjones.com