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Johnson Controls (JCI) Guides 2013 Above Street's View

 December 19, 2012 07:50 AM

(By Balaseshan) Johnson Controls Inc. (NYSE: JCI), a provider of automotive interiors and batteries, said it expects to post higher sales and earnings in fiscal 2013 despite a challenging economic environment. JCI guides 2013 above Street's view.

For the fiscal 2013, the company projects earnings per share (EPS) of about $2.60 to $2.70 and sales of about $43.5 billion, while Street predicts EPS of $2.59 on revenue of $42.27 billion.

JCI anticipates year-on-year segment income improvement of about 10% as well as sales and segment income improvement in all four of its businesses. The company predicts continued capital investment to support growth and margin expansion opportunities.

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Johnson Controls expects to make capital investments of $1.4 billion in 2013 versus $1.8 billion in 2012. About 80% of the company's capital expenditures in 2013 are associated with growth and margin expansion opportunities.

The company said the higher capital expenditures focus on increased manufacturing capacity for AGM batteries and on expansion in emerging markets. The increased investments also will support a higher level of Automotive Experience new business launches in 2013.

From a market perspective, Johnson Controls said that compared with 2012 markets, it expects slightly higher 2013 automotive production in North America and China with lower production in Europe.

Global non-residential construction spending is forecast to be relatively flat in 2013 as strength in emerging markets, especially Asia, offsets anticipated softness in North America and Europe.

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Automotive Seating 2013 sales are forecast to gain about 2%, reflecting higher production volumes in North America, partially offset by the lower production environment in Europe. Automotive Electronics and Interiors 2013 sales are projected to increase about 2%, reflecting higher volumes in Asia, partially offset by lower electronics sales in Europe.

The combined automotive backlog for 2013 to 2015 is $3.7 billion, approximately level with the 2012 to 2014 period due to a lower assumed auto production rate in Europe. Building Efficiency sales are forecast to rise 2% to 4% in 2013 due to growth in emerging markets and a moderate recovery in North America Systems and Service.

Power Solutions 2013 sales are estimated to increase about 10% to 12% due to higher battery volumes across all regions and channels, led by higher production in China, market share growth and increasing market demand for AGM batteries which are used in Start-Stop vehicles.

JCI closed Tuesday's regular session up 1.85% at $29.22. The stock has been trading between $23.37 and $35.95 for the past 52 weeks.



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