Johnson Controls, Inc. reports record sales and earnings for fourth quarter

Johnson Controls, Inc. reported record sales of $9.0 billion for the fourth quarter, and diluted earnings per share from continuing operations of $0.78, up 26 percent from $0.62 last year.

Sales for the 2007 fourth quarter totaled $9.0 billion, up 11 percent from $8.2 billion in 2006 as a direct result of the company increasing its share of its global markets. Income from continuing operations was $469 million versus $368 million last year, an increase of 27 percent as a result of the higher revenues and increased operational efficiencies.

"We are pleased to deliver record results for the fourth quarter and for the full fiscal year," says Chief Executive Officer Stephen A. Roell. "We expect to continue to win share and grow at a faster pace than our underlying industries through our innovation, cost advantages and world-class quality."

For the 2007 fiscal year, Johnson Controls sales totaled $34.6 billion compared with $32.2 billion for 2006, an increase of 7 percent. Income from continuing operations increased 25 percent to $1.3 billion. Diluted earnings per share from continuing operations in 2007 were $2.16 versus $1.75. Excluding a non-recurring tax benefit in the second quarter, 2007 diluted earnings per share from continuing operations were $2.10. Fiscal year 2007 is the company's 61 consecutive year of sales increases and 17 consecutive year of earnings increases.

All earnings per share amounts reflect the company's 3-for-1 stock split on Oct. 2, 2007.

Building efficiency sales were $3.6 billion, up 15 percent compared with 2006 revenues of $3.1 billion. The increase reflects strong commercial buildings markets globally and higher demand for the company's solutions to improve energy efficiency and lower operating costs in non-residential buildings. Segment income increased 23 percent to $316 million from $257 million as a result of the higher revenues as well as cost structure improvements associated with the company's branch office network and manufacturing operations. The backlog of uncompleted commercial systems and services contracts at Sept. 30, 2007 was $4.2 billion, an increase of 14 percent over the prior year amount, reflecting continued market share gains.

"It is a core part of our company's culture to understand customers' emerging needs and to deliver unique, practical solutions," Roell adds. "Our employees around the world continue to show an outstanding commitment to our customers, and I thank them for another record year."

Automotive experience sales in the quarter were $4.2 billion, 3 percent higher than $4.0 billion in 2006. North American sales increased 2 percent and European sales rose 5 percent, approximately in line with overall vehicle production levels. Sales in the Asia/Pacific region declined 3 percent due to lower volumes in Japan. Unconsolidated sales in China increased 48 percent. Segment income was $183 million, up 24 percent from $148 million last year as a result of a substantial improvement in North American profitability and a continued strong performance in Europe.

Power solutions sales increased 27 percent, to $1.3 billion from $1.0 billion last year due to higher unit prices resulting from the pass-through of increased lead costs, as well as slightly higher unit shipments. Segment income increased to $161 million, up 7 percent from $150 million in the 2006 fourth quarter due to the higher volume and improved operational efficiencies.

The company said its net debt to total capitalization at Sept. 30, 2007 was 30 percent, versus 35 percent at June 30, 2007.

On Oct. 9, 2007, the company issued guidance on its expected financial performance in 2008. Johnson Controls anticipates a sales increase of 10 percent, to approximately $38 billion. Income from continuing operations is estimated to increase approximately 18 percent, to $2.45 - $2.50 per diluted share. The company said the strong performance will be the result of its participation in growth markets, its exposure to non-cyclical sectors, its global capabilities and technology leadership as well as its cost discipline.

For the first quarter of 2008, the company expects diluted earnings per share to increase 25 percent - 32 percent versus the 2007 first quarter, to a range of $0.35 to $0.37.

"We have excellent visibility to our expected 2008 sales through our large and growing backlogs of new business," Roell says. "We are executing well on our growth strategies and expect a strong start to 2008."

For more information on Johnson Controls, Inc., visit the company's Web site.