Glendale-based Johnson Controls Inc. today reported fiscal third quarter net income of $417 million, up 17 percent over last year.
The company’s quarterly diluted earnings per share were 61 cents, up from 52 percent a year ago.
The 2012 quarter includes pre-tax restructuring charges of $52 million, partially offset by non-recurring tax benefits of $22 million, resulting in a net charge of 3 cents per diluted share. The 2011 third quarter included non-recurring pre-tax charges of $29 million or 4 cents per share.
Excluding the non-recurring items, the company reported record net revenues of $10.6 billion, up from $10.4 billion.
“While we saw a significant improvement in profitability in the third quarter, sluggish demand in some of our key markets along with a much weaker Euro resulted in lower top line growth than we expected,” said Stephen Roell, Johnson Controls chairman and chief executive officer. “Despite challenging markets, Building Efficiency segment income improved by 28 percent over last year as the business continues to gain market share.”
Roell added, “General weak demand in the automotive aftermarket was a negative for battery shipments in the quarter. At the same time, the prices for the spent battery cores we use in recycling lead hit an all-time high in the quarter, negatively impacting profitability. We do not expect this unusual combination of soft demand and higher input costs to continue past the fourth fiscal quarter. Automotive Experience benefitted from the higher auto production levels in North America, but the downturn in Europe slowed progress in our efforts to reduce operational inefficiencies.”
The company said that the restructuring initiated in the third quarter is targeted to improve profitability in Building Efficiency and Automotive Experience as well as to address the softness in some of its underlying markets. Additional restructuring actions are expected in the fourth quarter.
Johnson Controls said that due continued softness in its global markets and expectations for a lower Euro, it expects 2012 fourth quarter earnings to be up 0 to 5 percent year-over-year vs. earlier expectations for double-digit earnings improvements.
“As we look forward to the next several months, we expect continued softness in our markets and industries,” Roell said. “We will continue to take appropriate action to adjust as market conditions warrant. While these short-term challenges may be disruptive, we still believe in our long-term ability to outpace our markets and improve profitability across all of our businesses.”
