Johnson Controls Q1 earnings up 39 perent

Jan. 18, 2008
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.

2008 Full Year and Second-Quarter Outlook

The fiscal 2008 full-year earnings outlook provided by the company on October 9, 2007 remains unchanged. The company forecasts revenues increasing 10% to about $38 billion with diluted earnings per share from continuing operations increasing approximately 18% to $2.45 -- $2.50.

For the second quarter of fiscal 2008, the company forecasts diluted earnings per share from continuing operations of $0.46 -- $0.48, up from $0.44 in the prior year which included non-recurring tax benefits. Excluding the benefits, earnings per share in the 2007 second quarter were $0.37. Johnson Controls said it expects strong earnings increases in all three of its businesses.

Mr. Roell said, "The company continues to benefit from its business diversification and by bringing new value to our customers. We are increasing our investments in globalization and new enhanced technologies while ensuring we continue to improve our cost base. Our first quarter results represent a strong start to our fiscal year, and with the earnings visibility we have for our three businesses, we are confident in our full-year earnings guidance."

Johnson Controls, Inc. ("the Company") has made forward-looking statements in this document pertaining to its financial results for fiscal 2008 and beyond that are based on preliminary data and are subject to risks and uncertainties. All statements other than statements of historical fact are statements that are or could be deemed forward-looking statements and include terms such as "outlook," "expectations," "estimates," or "forecasts." For those statements, the Company cautions that numerous important factors, such as automotive vehicle production levels and schedules, energy prices, the ability to mitigate the impact of higher raw material costs, the strength of the U.S. or other economies, currency exchange rates, cancellation of commercial contracts, changes to domestic and foreign tax rates as well as other factors discussed in the Company's most recent Form 10-K filing (dated November 29, 2007 ) could affect the Company's actual results and could cause its actual consolidated results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, the Company.

Johnson Controls (NYSE: JCI) is the global leader that brings ingenuity to the places where people live, work and travel. By integrating technologies, products and services, we create smart environments that redefine the relationships between people and their surroundings. Our team of 140,000 employees creates a more comfortable, safe and sustainable world through our products and services for more than 200 million vehicles, 12 million homes and one million commercial buildings. Our commitment to sustainability drives our environmental stewardship, good corporate citizenship in our workplaces and communities, and the products and services we provide to customers. For additional information, please visit