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Johnson Controls Posts Record 2Q Earnings

Earnings climbed 29 percent on higher revenue as all three of its business segments reported double-digit sales increases amid a recovering global economy.

MILWAUKEE (AP) -- Johnson Controls Inc.'s fiscal second-quarter earnings climbed 29 percent on higher revenue as all three of its business segments reported double-digit sales increases amid a recovering global economy.

The Milwaukee company, which makes auto parts and building climate control systems, cut its third-quarter earnings and revenue guidance as it warned that higher climate control sales will be offset by auto production cuts due to the earthquake in Japan.

It raised its full-year revenue guidance, however.

Its shares fell 42 cents, or 1 percent, to $40.31 in pre-market trading.

Johnson Controls said Monday its net income rose to a record $354 million, or 51 cents a share, for the quarter ending March 31, up from $274 million, or 40 cents per share, a year ago.

Excluding acquisition and restructuring costs, the company said it earned 56 cents per share. That beat the 55 cents a share that analysts polled by FactSet expected.

Revenue rose 22 percent to $10.1 billion from $8.3 billion a year ago. Analysts expected $9.4 billion.

The company reported that its auto parts operation saw revenue jump 25 percent from the same quarter of last year to $5.2 billion as it finished 18 major product launches in the quarter for Ford, Daimler, Kia, Volkswagen, Tata and Honda.

The power solutions business, which includes auto batteries, saw revenue jump 19 percent to $1.4 billion as original equipment and replacement battery shipments rose.

Revenue rose 18 percent to $3.5 billion at its building efficiency unit with strong demand in North America in the education, health care and government markets. The unit had an order backlog of $5.1 billion, up 18 percent from last year, the company said.

JCI raised its revenue forecast for the full 2011 fiscal year by $1 billion to $39.5 billion. That's up 15 percent over 2010, due mainly to higher growth in the building efficiency operations, partially offset by lower auto production in the third quarter because of the devastating March 11 earthquake and tsunami in Japan. Analysts expected revenue of $38.7 billion for the year.

The company said it expects third-quarter revenue to drop by $500 million due to the earthquake, lowering earnings per share by 16 cents to 18 cents. Even with the production cuts, it still expects to earn 51 cents to 53 cents per share for the quarter.

Analysts expected earnings of 67 cents a share for the third quarter on $9.7 billion in revenue.

The company predicted that the earthquake will have little impact in the fourth quarter, and it expects to recover lost third-quarter revenue and earnings in the first half of fiscal 2012.

"We are on track for a record year for sales and earnings in 2011, outpacing the growth rates of our key markets by gaining share and improving profitability in each of our businesses," CEO and Chairman Stephen Roell said in a statement.

He said there are uncertainties ahead about auto production because of the earthquake, but said he expects the impact to be short-lived.

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