Johnson Controls Profit Increases 17 Percent

CHICAGO – Johnson Controls Inc. (JCI), the No. 4 U.S. auto parts maker, on Tuesday posted a 17 percent rise in quarterly profit as the interior systems specialist boosted its market share.

Automotive group sales of seating, interiors and batteries climbed 16 percent despite challenging industry conditions, the Milwaukee-based company said.

Auto supplier stocks have been under pressure due to concern about the sustainability of consumer demand, high inventories of unsold vehicles on dealer lots, and the potential for automakers to cut production as a result.

Vehicle production in Europe and North America in the quarter was little changed from a year earlier, Johnson Controls said.

Yet interior systems makers like Johnson Controls have fared better than some other component makers because of automakers' continuing focus on upgrading vehicle interiors.

Johnson Controls said it was able to achieve strong market share growth in the quarter.

Net income rose to $222 million, or $1.15 a share, in the fiscal third quarter ended June 30, up from $190 million, or $1 a share, a year earlier.

Analysts' estimates had ranged from $1.10 to $1.19 a share, with the average at $1.15, according to Reuters Estimates.

The firm, which also makes environmental control systems for commercial buildings, said total sales increased 14 percent to $6.8 billion in the quarter.

Sales in the controls group rose 7 percent due to higher revenue from system installations, technical services and facility-management contracts. The company said its backlog of uncompleted control system installation and service contracts increased 4 percent over the prior quarter, partly due to growth in orders for domestic new-construction systems.

Johnson Controls stood by its forecast for a double-digit increase in net income in fiscal 2004 but boosted its outlook for consolidated sales growth to a range of 14 percent to 16 percent from 13 percent to 15 percent.