Emerson Acquires Johnson Business

St. Louis-based Emerson Climate Technologies announced that it has acquired the marine container and boiler business of Johnson Controls Inc. ( JCI - Analyst Report ) in Glendale, Wisconsin. Emerson is the world’s leading provider of heating, ventilation, air conditioning (HVAC) and refrigeration solutions for residential, industrial and commercial applications. The acquisition will help the company expand its refrigeration technology and product portfolio in the global transportation industry.

The business supplies control optimal operation of refrigerated sea containers and marine boilers. It also supplies systems installed in more than 650,000 containers and 2,200 ships that monitor and report refrigeration conditions.

Johnson Controls is a supplier of automotive interiors, batteries, and other control equipment. The company functions through three segments: Automotive Experience, Building Efficiency and Power Solutions. Its main competitors include Magna International Inc. ( MGA - Analyst Report ) .

Recently, the company announced that it would acquire 49% stake in Karat Guc Sistemleri Sanayi & Ticaret AS, a Turkey-based distributor of car-batteries. Karat sells batteries including Varta and Energizer brands, both owned by Johnson.

It also raised the prices of lead-acid batteries by 8% in the U.S. and Canada in order to support increased investments for meeting environmental, health and safety standards. The new price will be applied for orders starting on May 1, 2012.

The Zacks #3 Rank (Hold) company posted a 9% increase in profit to $410 million or 60 cents per share in the first quarter of its fiscal 2012 ended December 31, 2011 from $375 million or 55 cents per share in the same quarter of prior fiscal year. However, the profits were lower than the Zacks Consensus Estimate by 2 cents per share.

The higher profits were attributable to higher earnings in the company’s Power Solutions and Automotive Experience segments. Net sales in the quarter rose 9% to $10.4 billion, which is slightly lower than the Zacks Consensus Estimate of $10.5 billion.

Johnson Controls lowered its earnings guidance for the second quarter and the fiscal year 2012 due to decline in automotive production in Europe, weak demand for aftermarket battery due to weather-related factors, indefinite shut down of Shanghai, China battery plant and lower demand for residential HVAC.

The company anticipates earnings in the second quarter of fiscal 2012 to be 52 cents–54 cents. For the fiscal year, the company lowered its earnings guidance to $2.70–$2.85 compared with the earlier guidance of $2.85–$3.00.