Glendale-based Johnson Controls reported a net loss of $530 million during the second quarter of fiscal 2016, down from a profit of $529 million last year.
The $1 billion swing was the result of a number of non-recurring costs brought about by the company’s planned merger with Tyco International, the spin-off of its automotive experience business, joint venture integrations and cost saving programs.
The company reported a diluted loss per share of 80 cents after having earnings of 68 cents per share last year.
Adjusted earnings per share, which accounted for the non-recurring costs, was up 18 percent to 86 cents per share.
The company also increased its full-year guidance, predicting adjusted earnings would be between $3.85 and $4, up from a range of $3.70 to $3.90 per share.
Revenues were off about 1.8 percent to $9 billion, down from about $9.2 billion last year. The company attributed the drop to the de-consolidation of its auto interiors business and foreign currency exchange.
The lost revenue was also partially offset by higher organic volumes, up 3 percent, across the business and revenue from the joint venture with Hitachi.
“I could not be more proud of the continued execution by our team,” said Alex Molinaroli, Johnson Controls chairman, president and chief executive officer. “This quarter we drove organic growth in each of our businesses while delivering significant margin expansion.”
The costs driving the company’s non-adjusted earnings down amounted to a net charge of $1.68 per share. They included:
- $131 million in transaction, integration and separation costs from the spin-off of Adient, Tyco merger and Hitachi joint venture.
- $229 million in restructuring and impairment for cost reduction initiatives including workforce reductions, plant closures and asset impairments.
- $780 million non-cash tax charge for the change in assertion over permanently reinvested earnings as a result of the proposed Adient spin-off.
The company’s building efficiency segment reported revenue of $3.2 billion, up 33 percent from 2015. The increase was driven by incremental revenue from the Hitachi joint venture. With that and foreign currency excluded, revenues were up 3 percent.
During the quarter the company announced a 23-year, $67.8 million contract for energy improvements at Norfolk Naval Base, a partnership to replace rooftop HVAC units at 225 Target stores and a $15 million energy performance contract with Arkansas State University.
The power solutions segment had revenue of $1.6 billion, even with 2015 performance. Excluding foreign currency and lower lead pass-through costs, the company said sales were up 5 percent with higher volumes in the Americas and Asia.
A company record of 2.6 million batteries were shipped to China during the quarter, up from 1.7 the previous year.
The automotive experience business, which will become Adient in October, reported revenue of $4.3 billion, down 18 percent from the prior year. The company said the drop was the result of re-consolidating its interiors business and foreign currency exchange. Excluding those factors, sales were up 2 percent with growth in North America and Asia.
