Johnson Controls Sales, Profit Decline -- Update
29 January 2016 - 2:29AM
Dow Jones News
By Lisa Beilfuss
Johnson Controls Inc., which this week struck a deal to merge
with Tyco International PLC , said sales slid in the first quarter
amid the company's efforts to restructure itself.
The Milwaukee company and Tyco on Monday unveiled a mostly-stock
transaction roughly valued at $14.4 billion, a so-called inversion
that will move Johnson Controls' address to Ireland and save it
considerable tax dollars. The deal will bring together Johnson
Controls' business selling heating and air-conditioning equipment
for skyscrapers, schools, hospitals and other structures with
Tyco's lines of security and fire-suppression gear into a company
with more than $30 billion a year in sales.
Johnson Controls has been pivoting away from low-margin
automotive markets and toward more profitable industrial
businesses. As part of that shift, the company has said it would
spin off the remaining parts of its automotive-seat business--its
largest unit and the world's biggest maker of automotive seating.
The new entity will include the company's car seating line as well
as its share of an auto interiors venture with China's Yanfeng
Automotive Trim Systems Co.
The separation of the automotive experience segment is on track,
Johnson Controls said Thursday, as sales in the unit fell 20% from
a year earlier. The decline was mostly due to a deconsolidation of
its interiors business, the company said. Last year, Johnson
Controls formed a joint venture with its interiors business and
maintains a 30% stake in the venture. Interior sales were included
in the year-earlier results.
Sales in its power solutions business also fell, although an 18%
increase in revenue from the building efficiency business helped
offset the decline there and in its automotive business.
Overall, Johnson Controls reported a profit of $450 million, or
69 cents a share, down from $507 million, or 76 cents a share, a
year earlier. Excluding restructuring costs, among other items,
earnings per share rose to 82 cents from 79 cents.
Revenue declined 7.2% to $8.93 billion. Analysts projected 82
cents in adjusted per-share profit on $9.29 billion in revenue,
according to Thomson Reuters.
Shares in the company, down 1.3% since the merger was announced
and off 24% over the past 12 months, rose 0.5% in morning
trading.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
January 28, 2016 10:14 ET (15:14 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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