Johnson Controls Inc. posted 30-percent hike in net profit for its first fiscal quarter to $469 million or 69 cents per share. A year ago, net profit was $359 million, or 52 cents per share. Revenue at the supplier surged 5 percent to $10.91 billion, exceeding expectations of analysts surveyed by Thomson Reuters I/B/E/S of $10.73 billion.
"The significant improvement in profitability resulted from our focus on execution and cost discipline,” chief executive Alex Molinaroli said in a statement. He added that Johnson Controls also benefitted from the higher levels of global automotive production. Johnson Controls produces car interiors, seating systems, and batteries.
A larger part of Johnson Controls' overall revenue came from its automotive segment, which revenue surged 10 percent to $5.76 billion thanks to stronger demand for vehicles around the world. Auto industry production jumped 10 percent in North America, 2 percent in Europe and 14 percent in China, Johnson Controls said.
The supplier said that automotive revenue in China climbed 33 percent in the quarter to $1.9 billion while income rose 130 percent to $232 million. Earlier this month, Johnson Controls sold its automotive electronics business to Visteon for $265 million in cash. Johnson Controls posted a 6 percent rise in battery sales $1.77 billion and a 12 percent rise in battery income to $308 million.
The supply expects to post a net profit of between $3.15 and $3.30 per share for 2014 with free cash flow of $1.6 billion, lower that the Wall Street forecast of $3.31 per share. Johnson Controls said expects to post a fiscal second quarter earnings of 64 to 66 cents per share. Thomson Reuters I/B/E/S poll of analysts shows average expectation of 67 cents per share. The supplier increased its quarterly dividend in the first fiscal quarter by 16 percent and completed $1.2 billion in share repurchases.
Johnson Controls originated from Warren S. Johnson, a professor at the State Normal School in Whitewater, Wisconsin. Johnson was the inventor of the first electric room thermostat in 1883. In 1885, Johnson and a group of Milwaukee investors incorporated the Johnson Electric Service Company, which was engaged in the manufacture, installation and servicing of automatic temperature regulation systems on buildings. Johnson died in 1911.
In 1974, Johnson Electric Service changed its name to Johnson Controls. In 1978, Johnson Controls acquired Globe-Union and in 1985, Johnson Controls acquired Hoover Universal and Ferro Manufacturing. In 2005, Johnson Controls acquired York International, owner of the York brand of refrigeration and HVAC equipment, for $3.2 billion.