Leaders at Glendale-based Johnson Controls Inc. this morning predicted record profits and higher revenues in 2016 at its Analyst Day in New York City.
The company is in the process of spinning off its Automotive Experience business into a new, publicly traded company, which it now expects will be complete by Oct. 3, 2016.
“We expect higher revenues and record profitability in fiscal 2016 as we manage through the significant work required to split into two world-class companies after the end of this fiscal year,” said Alex Molinaroli, chairman and chief executive officer of Johnson Controls. “We believe our strategic and operating plans will continue to drive strong performance in all of our businesses as we firmly position both new companies for growth.”
Molinaroli hinted at RSM’s 2015 Executive Summit in Milwaukee in October that the costs of spinning off the automotive segment will be significant next year, so revenue is not expected to reach record levels.
More information about Molinaroli’s vision for the future of Johnson Controls is detailed in the current BizTimes Milwaukee cover story.
Excluding the separation/transaction/integration costs and non-recurring items, Johnson Controls expects about 10 percent organic sales increases in both its Building Efficiency and Power Solutions divisions. The company anticipates diluted earnings per share will be about $3.70 to $3.90, up 8 to 14 percent year-over year. And consolidated revenue is expected to be about $38.6 billion, up about 4 percent over 2015.
A 37 to 39 percent increase in Building Efficiency division sales is expected to be driven by the company’s recently completed Hitachi joint venture, as well as increased non-residential construction spending. In the automotive battery business, higher sales of Absorbent Glass Mat (start-stop) batteries are expected to drive a 9 to 11 percent increase in sales.
“We are confident in our fiscal 2016 outlook as we continue to focus on execution and delivering on our commitments,” Molinaroli said. “Most importantly, we are creating two great companies, both with exceptionally bright futures, and positioned to lead in their respective markets. We expect both companies to deliver sustainable growth, improving margins and consistent capital returns resulting in compelling long-term value to our shareholders.”