Johnson Controls 4Q HVAC Income Higher
Nov 8, 2012
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HVAC maker Johnson Controls (Milwaukee, WI, U.S.) reported a net loss of $8 million in the fourth quarter of its fiscal year 2012.

Net revenue was $10.4 billion in the fourth quarter of fiscal 2012, down 4% from $10.8 billion in 4Q 2011. Excluding the impact of foreign exchange, revenues were up 1%.

Johnson Controls' Building Efficiency business segment, which sells HVAC equipment under the York and other brand names, reported higher segment income despite a soft global market. Sales in fiscal 4Q 2012 were $3.8 billion, down 7% (down 4% excluding currency) from $4.1 billion in 4Q fiscal 2011.

Higher revenues in Asia were more than offset by lower sales in North America, Europe, and the Middle East.

Residential HVAC sales were up 9%, with demand helped by record high temperatures in North America.

Orders in the quarter were 10% lower than in the same quarter of the previous year, but the backlog of projects at the end of the quarter, excluding foreign exchange, was up 3% to $5.2 billion, led by strength in North America Systems and Asia.

Building Efficiency segment income was $327 million, up 15% from $285 million 4Q fiscal 2011.

The North America Service segment income was up 62%. North America Systems income was up 22% on improved productivity and operational efficiencies.

Johnson Controls believes softening end markets and negative foreign currency will limit its ability to grow revenues and earnings in the upcoming year. It also anticipates a higher effective tax rate of 20% in 2013 due to an increased percentage of total earnings coming from the United States. The company expects 2013 first-half earnings to be significantly lower than the same period of 2012 with higher year-over-year earnings in the second half of the year. It added that it believes the financial benefits of the restructuring announced in the current quarter will begin to accrue in the second half of fiscal 2013. The company expects full-year 2013 earnings to be flat to slightly higher than 2012.

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