Johnson Controls reports higher profit amid restructuring

Johnson Controls Inc. headquarters
The Johnson Controls Inc. operational headquarters in Glendale.

Glendale-based Johnson Controls Inc. today reported fiscal fourth quarter net income of $349 million, or 53 cents per share, up from $309 million, or 46 cents per share, in the fourth quarter of 2014.

Johnson Controls Inc. headquarters
The Johnson Controls Inc. headquarters in Glendale.

The diversified technology and industrial firm’s quarterly operating income was $158 million, down from $412 million in the same period a year ago. Restructuring and impairment costs were $397 million, compared with $162 million in the prior year quarter, mostly due to Automotive Seating plant restructuring and asset impairments.

The company is in the midst of several transactions to divest some segments and split the company. It reported $34 million in transaction, integration and separation costs in the quarter, and a net gain from divestments of $145 million.

Also in the quarter, Johnson Controls took a $124 million hit from foreign cash repatriation as part of its divestitures. Orders were down 4 percent year-over-year, excluding the foreign exchange, driven by weakness in the federal government business and in Europe and Asia.

Revenue totaled $8.7 billion in the fourth quarter, down from $10 billion in the fourth quarter of 2014.

“We ended fiscal 2015 with solid contributions from all of our businesses, continuing the strong performance we have seen throughout the year,” said Alex Molinaroli, chairman, president and chief executive officer of Johnson Controls. “While the macro-economic environment is challenging in some key markets, each of our businesses again generated significant margin improvements in the fourth quarter and we see increasing benefits from the Johnson Controls Operating System across the company. We enter the new fiscal year well-positioned to execute on our enterprise plan and deliver long-term shareholder value.”

For the full fiscal year, Johnson Controls reported net income of $1.7 million, or $2.36 per share, up from $1.3 million, or $1.80 per share, in 2014.

Its 2015 operating income was $2.2 billion, up from $1.9 billion last year.

And full-year revenue totaled $37.2 million, down from $38.7 million in 2014.

“Our ability to achieve record results while executing on our portfolio changes is a testament to the commitment of our employees and leadership team,” Molinaroli said. “Fiscal 2015 was a year of transformation and execution as we change our portfolio and build upon our foundation for operational excellence and growth in the future. We are well-positioned to deliver record growth and profitability as we enter fiscal 2016.

“We have a solid start to fiscal 2016 in all of our businesses. Through our capital allocation strategies, we’re focusing Johnson Controls on growth technologies and markets with higher returns. Delivering on our commitments remains our highest priority. I would like to thank all Johnson Controls employees across the globe for embracing the continuing changes to our company as we work together to achieve even higher levels of success.”

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Molly Dill, former BizTimes Milwaukee managing editor.

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