How Did Johnson Controls Fare In Q3 2016?

Johnson Controls (NYSE:JCI) announced its Q3 2016 results on July 21, 2016. While the company managed to beat the EPS estimates, it missed on the revenue.

Highlights Of the Quarter:

1) Growth In Building Efficiency Driven By North America And Asia

• 3% growth seen in North America, and 9% in Asia.
• Orders secured up by 5%.
• Hitachi JV continues to exceed expectations, with strong performance in China, Japan, and Taiwan, and greater opportunities witnessed in North America.
• Pricing discipline and cost reductions are being implemented to drive profitability within the Hitachi JV.

2) Power Solutions Sees Higher Volumes In All Regions

• Global shipments of start-stop up 22%, driven by China and the Americas, where growth rates of 79% and 78% were seen.
• Lead price of $1,700 in Q3 vs $1,950 last year, impacting the company’s top-line.
• Strong price discipline and a favorable product mix help to improve margins.
• During the quarter, the company announced partnership with Bohai Piston Group of China to build a fourth battery plant, giving access to five million vehicles by 2020, and increasing capacity of AGM production in North America to 11 million units by 2020.

3) Sales Down In Automotive Experience, But Impressive New Business Wins

• Strong global production in Asia and Europe, offset by expiring programs in North America.
• China non-consolidated JVs increased 49% in the quarter, but up only 11% if adjusted for the Interiors JV and FX.
• Quoted new businesses worth $4.3 billion year-to-date, exceeding FY 2015 figure of $3.6 billion, well on the way to a record year of new businesses secured.

4) Tyco And Adient Update

• Company is speeding up its merger with Tyco, now expected to close on September 2, against a previously planned date of September 30.
• Adient’s first operational day was July 1, as planned.
• Adient is a market leader in North America, Europe, and China, with a 200 basis points margin improvement expected over the medium term.

CEO Alex Molinaroli also stated that the Brexit has resulted in a little slowdown in results in the UK, but has not affected the European business. However, since UK only contributes about 3% to the company’s revenues, it may not have much of an impact.

Have more questions on Johnson Controls? See the links below:

• How Will Johnson Controls Perform In Q3 2016?
• Why Is Johnson Controls Banking On China For Its Absorbent Glass Mat Batteries?
• Why Is Johnson Controls Increasing The Production Of Its Absorbent Glass Mat (AGM) Batteries?
• What Are The Prospects For Johnson Controls’ Power Solutions Business?
• What Will Be The Effect On The Segment Operating Margin As A Result Of The Johnson Controls-Tyco Merger?
• What Are The Benefits Johnson Controls Will Attain From The Tyco Merger?
• What Will Be Johnson Controls’ Revenue Composition Post The Tyco Merger?
• Why Did The SG&A Expenses For Johnson Controls Increase In The First Half Of FY 2016?
• How Did Johnson Controls’ Segments Perform in Q2 2016?
• Will The U.S. Treasury Department Rules, That Killed The Pfizer-Allergan Deal, Affect Johnson Controls-Tyco Merger?
• Johnson Controls’ Earnings Beats Expectations
• Will Johnson Controls Miss Estimates Again?
• How Has Johnson Controls’ Net Sales Changed By Geographic Areas?
• How Does The Adient Spin-Off And Tyco Merger Create Value For Johnson Controls’ and Tyco’s Shareholders?
• What Costs Did Johnson Controls’ 2015 Restructuring Plan Entail?
• Johnson Controls: Year 2015 In Review
• How Will Johnson Controls’ Revenue And EBITDA Composition Change In The Next 3 Years?
• What’s Johnson Controls’ Fundamental Value Based On Expected 2016 Results?
• What’s Johnson Controls’ Revenue And EBITDA Breakdown?

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