Auto parts supplier Johnson Controls, Inc. (JCI) reported Tuesday a profit for the second quarter that more than halved from last year, hurt by restructuring charges and lower revenues. Stripping down the charges, adjusted earnings per share for the quarter matched analysts' expectations, while quarterly revenues missed their estimates by a whisker.
The company also provided earnings guidance for the second quarter, in line with Street view, while reaffirming its earnings and revenue forecast for the full-year 2013.
"Our second quarter results were at the high end of our previous guidance. Building Efficiency posted earnings level with last year despite soft institutional and construction markets which negatively impacted revenues. Automotive Experience benefited from higher auto production in North America and Asia, but these improvements were more than offset by the low production levels as well as operational and restructuring-related costs in Europe," Chairman and CEO Steve Roell said in a statement.
The Milwaukee, Wisconsin-based company posted net income of $148 million or $0.21 per share for the second quarter, sharply lower than $379 million or $0.55 per share in the prior-year quarter.
Excluding restructuring and non-recurring items, adjusted net income for the quarter was $287 million or $0.42 per share, compared to $378 million or $0.55 per share in the year-ago quarter.
On average, 24 analysts polled by Thomson Reuters expected the company to report earnings of $0.42 per share in the second quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter declined 1 percent to $10.43 billion from $10.57 billion in the same quarter last year, and missed nineteen Wall Street analysts' consensus estimate of $10.48 billion by a whisker.
Building efficiency sales declined 3 percent from last year, with segment profit also dropping 14 percent, and automotive experience sales decreased 3 percent, with segment profit plunging 21 percent from the prior-year quarter. Meanwhile, sales for power solutions were up 10 percent from a year ago, with its segment profit also growing 19 percent.
Income from business segments for the quarter declined 20 percent to $463 million from $581 million in the prior-year quarter.
The company had on March 6 announced that it retained JPMorgan to explore a potential sale of the automotive electronics business to maximize shareholder value. The company said the process is in its early stages and it expects to provide an update within the next three to four months.
"Despite a challenging global market, we anticipate stronger profitability in the second half of fiscal 2013 consistent with market expectations. Our second half results will reflect restructuring benefits and improved operating performance. We feel confident with our previously issued guidance for higher Johnson Controls earnings in 2013," Roell added.
Looking ahead to the third quarter, the company said "it is comfortable with analyst consensus estimate of $0.75 per share."
For fiscal 2013, Johnson Controls reaffirmed its guidance, continuing to expect earnings in a range of $2.60 to $2.70 per share and consolidated net sales of about $43.5 billion. Street is currently looking for full-year 2013 earnings of $2.59 per share, on annual revenues of $43.10 billion.
In Tuesday's regular trading session, JCI is currently trading at $33.09, down $0.06 or 0.18% on a volume of 0.95 million shares.
For comments and feedback: editorial@rttnews.com