Auto parts and building products maker Johnson Controls, Inc. (JCI) on Monday said its fiscal third quarter profit fell 63% from last year, but still bested analyst estimates.
The Milwaukee-based company reported fiscal third quarter net income of $163 million, or 26 cents per share, down from $439 million, or 73 cents per share, in the year-ago period. Sales plunged 29% to $7 billion, from $9.9 billion last year.
On average, Wall Street analysts expected a much lower profit of 18 cents per share, but on higher sales of $7.4 billion.
The company cited recent cost-cutting measures for the better-than-expected profit, which helped offset a big sales slowdown. Johnson said that sales in its automotive unit dropped 38% and saw a $14 million loss in the period, hampered by General Motors and Chrysler's plant shutdowns as the two automakers reorganized under bankruptcy protection.
Johnson's building efficiency unit, which makes HVAC equipment and other building products, saw its revenue fall 14% in the quarter, as new construction and discretionary maintenance projects continued to wane during the economic recession.
The company's power solutions unit also saw a 39% sales drop in the period.
Johnson Controls shares rose $1.37, or +6.2%, in morning trading Monday.
The Bottom Line
We have avoided shares of JCI since our early June coverage began, when the stock was trading at $31.50. The company has a 2.42% dividend yield, based on Friday's closing stock price of $21.52. The stock has technical support in the $15.00-$17.50 price area. If the shares can firm up, we see overhead resistance around the $24-26 price levels.
Johnson Controls, Inc. (JCI) is not recommended at this time, holding a Dividend.com DARS Rating of 3.1 out of 5 stars.
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