NEW YORK Johnson Controls Inc. posted a sharp improvement in earnings in its fiscal third quarter as the companys European automotive business returned to profitability.
The Milwaukee-based company posted net income of $571 million for the three months ended June 30, up 32.5 percent from $431 million in the same period last year on sales that increased 2.4 percent to more than $10.83 billion.
"We are pleased with the significant improvement in profitability of all three businesses in the third quarter. Our initiatives to reduce costs and improve operational efficiencies continue to gather momentum and deliver margin expansion," JCI chairman and chief executive officer Stephen Roell said in a statement July 18. "Despite a challenging production environment, our European automotive business generated a profit in the quarter and profitability improved in our automotive metals business. Cash flow in the quarter was very strong, enabling us to reduce net debt by more than $550 million."
JCIs Power Solutions segment, which supplies lead-acid batteries to the automotive industry, generated fiscal third-quarter operating earnings of $171 million, up 11.8 percent from $153 million a year earlier, as strong demand in Europe continued to bolster the segment, the company said. Additionally, the company announced it had secured new orders that will expand battery shipments by approximately 1 million units per year.
JCIs Automotive Experience and Building Efficiency segments also showed significant increases in operating earnings, which the company attributed to recent recoveries in the European and Asian markets. The Automotive Experience segment, which focuses primarily on automotive seating, electronics and interiors, saw its quarterly operating earnings increase 33.5 percent to $279 million from $209 million a year ago.
"Earlier this fiscal year, we said that our second-half performance would be positively impacted by our restructuring initiatives, sequential improvements in Automotive Experience European and South American businesses, and profitability initiatives in Building Efficiency," Roell said. "We expect the benefits of these actions to deliver further improvements in our fiscal fourth quarter. We are confident in our ability to increase our earnings, strengthen our balance sheet and deliver shareholder value."