Johnson Controls Q1 earnings up 39 perent

Confirms full-year 2008 outlook for double-digit earnings increase


MILWAUKEE , Jan. 18 /PRNewswire-FirstCall/ -- Johnson Controls, Inc. (NYSE: JCI) today reported record sales and income from continuing operations for the first quarter of fiscal 2008, with diluted earnings per share from continuing operations increasing 39% to $0.39 from $0.28 last year (adjusted for a 3-for-1 stock split effective October 2 , 2007). The company also reconfirmed its October earnings guidance of 18% year-over-year growth.

Chairman and Chief Executive Officer Stephen A. Roell said, "We continue to deliver record results with strength in both the domestic markets as well as higher growth international markets. Building efficiency continues to generate double-digit sales and earnings improvements and automotive experience profitability is increasing as planned. Our exposure to global markets and focus on cost and quality improvements continue to positively impact our performance. We believe we are on track to achieve another year of strong sales and earnings growth."

First-Quarter 2008 Results

Sales for the quarter ended December 31, 2007 rose 16% to a record $9.5 billion from $8.2 billion last year, reflecting growth by all three businesses. Segment income was $374 million, up 25% from $300 million in the 2007 quarter, as a result of the higher volume and margin expansion. Income from continuing operations was $235 million, 40% higher than the prior year's $168 million due to the higher segment income and a lower effective tax rate.

Building efficiency sales increased 11% to $3.2 billion from $2.9 billion due to increased global demand for the company's offerings for nonresidential buildings that improve energy efficiency and reduce greenhouse gas emissions. The company reported strong revenue increases for its systems, services and global workplace solutions revenues. Segment income increased 33% to $163 million from $123 million in 2007, due to the higher global volumes and operational efficiencies. The backlog of uncompleted contracts at December 31, 2007 was $4.4 billion, up 13% versus the previous year, reflecting strong demand in domestic and international markets.

Power solutions sales were up 55% to $1.7 billion from $1.1 billion. The increase was primarily due to higher prices resulting from the pass-through of increased lead costs, as well as increased unit shipments. Segment income decreased 6% to $133 million from $142 million in the 2007 quarter, which included a one-time benefit of $11 million. Income in the 2008 quarter was impacted by additional investments in the company's hybrid vehicle battery capabilities. Johnson Controls is expected to launch production of the industry's first lithium-ion battery systems later in the year.

Automotive experience sales for the first quarter of 2008 totaled $4.6 billion, up 9% from $4.2 billion. Revenues in Europe increased 14% while North American sales were 5% higher. Industry light vehicle production in Western Europe and North America was approximately 5% and 1% higher, respectively, than the prior year amounts. Unconsolidated sales in China increased over 40% reflecting the strong vehicle production environment and new business. Segment income more than doubled to $78 million versus $35 million for the prior year quarter. In North America , income increased to $10 million from a loss of $52 million a year ago due to operational efficiencies and improved pricing.

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