Johnson Controls Forecasts Higher Profitability Across Businesses In 2015

(RTTNews) - Auto parts supplier Johnson Controls, Inc. (JCI) announced Tuesday that it expects to post record profits in fiscal 2015, with all three of its businesses reporting higher profitability. However, the company projects annual sales to be flat with last year. The company revealed this ahead of its annual New York institutional investor meet later in the day.

At the event, Johnson Controls Chairman and CEO Alex Molinaroli and the company's executive management team will provide an in-depth review of the company's 2015 market forecasts as well as its growth strategies, opportunities and financial expectations.

"We continue to make progress in re-shaping our portfolio and executing on our strategies to be a leading multi-industry company. We believe our strategic and financial plans will continue to drive improved performance and higher operating margins," Molinaroli said in a statement.

The Milwaukee, Wisconsin-based company said it expects adjusted earnings for fiscal 2015 to be in a range of about $3.55 to $3.70 per share, excluding transaction and integration costs associated with M&A activity.

On average, 21 analysts polled by Thomson Reuters currently expect the company to report earnings of $3.61 per share for the year. Analysts' estimates typically exclude special items.

The company noted that it anticipates higher profitability across all three businesses.

The company also projects consolidated annual net sales of about $42.3 billion, level with fiscal 2014. Eighteen Wall Street analysts currently have a consensus revenue estimate of $43.15 billion for the year.

The company said it expects sales increases in building efficiency and power solutions. It also projects segment income growth of about 11 percent.

"In the coming years, we believe the Johnson Controls Operating System will increasingly impact our profitability as we implement the Johnson Controls Way, leveraging our unique strengths and expertise across the enterprise," Molinaroli added.

On a segmental basis, automotive seating sales are expected to decrease 5 to 6 percent, while segment margins projected to increase to about 5.4 to 5.7 percent.

Meanwhile, power solutions sales are expected to increase about 8 to 10 percent, with segment margins projected to rise about 16.5 to 16.7 percent, excluding the impact of lead pricing.

Building efficiency sales, excluding Global Workplace Solutions (GWS), are also expected to be up 9 to 11 percent, with segment margins forecast to increase to 9.4 to 9.6 percent. Excluding the acquisition of Air Distribution Technologies (ADT), sales are expected to increase only 2 to 4 percent, with segment margin growth of 9.4 to 9.6 percent.

Johnson Controls said it expects 2015 capital investments of $1.3 billion, up about $100 million from last year.

The company announced that it expects the completion of its interiors joint venture on July 1, 2015 and is confident that the joint venture with Hitachi and the divestiture of its GWS business would both be completed in fiscal 2015.

Johnson Controls noted that it will continue making significant investments in the Chinese market across all of its businesses as it sees a growth opportunity there. The company generated more than $8 billion in annual revenues in fiscal 2014 in China, including its non-consolidated joint ventures.

JCI closed Monday's regular trading session at $49.18, down $0.45 on a volume of 5.14 million shares.