Johnson Controls Lifts 2Q Profit, But Expects Hit From Japanese Disaster

Despite the catastrophic earthquake and tsunami in Japan, Johnson Controls (NYSE:JCI) revealed a stronger-than-expected 29% improvement in second-quarter profit with sales up across-the-board, though its shares slipped on a bleak fiscal earnings view.

The company experienced double-digit sales growth across all of its business segments, with automotive up 25% to $5.2 billion, helped by higher demand across its regions. Power solutions were up 19% to $1.4 billion, attributed by the company to higher shipments of both aftermarket and original equipment batteries.

“The second-quarter results show solid momentum across all three of our businesses, with each achieving significantly higher revenues and profitability,” Johnson Controls CEO Stephen Roell said in a statement.

The Milwaukee-based company posted net income of $354 million, or 51 cents a share, compared with $274 million, or 40 cents a share, in the same quarter last year. Excluding one-time items, Johnson Controls earned $383 million, or 56 cents a share, narrowly ahead of average analyst estimates polled by Thomson Reuters of 55 cents.

Revenue for the diversified manufacturer, including air conditioners and interior products and systems for cars and trucks, was $10.1 billion, up 22% from $8.3 billion a year ago, beating the Street’s view of $9.37 billion.

While the company believes it is on track for a record year for sales and earnings, Roell noted there are some uncertainties regarding auto production levels due to disruptions in the automotive supply chain, deriving from the devastating earthquake and tsunami in Japan.

The events in Japan have forced automakers to cut supplies and temporarily soften manufacturing levels. The company sees non-GAAP earnings in the range of $2.40 to $2.45 a share, though Johnson Controls suspects its profit will be hurt by 18 cents to 20 cents after factoring in the total affects of the Japanese disaster.

Despite the weary outlook, the company sees fiscal 2011 revenues up 15% over 2010 to $39.5 billion, up from its earlier forecast of $38.5 billion.