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Johnson Controls Inc. (JCI - Analyst Report) plans to layoff 392 workers at its Johnson Controls Interior Manufacturing (JCIM) plant, located in National Turnpike in Louisville, Kentucky. The plant is in operation from 1999 and manufactures injection-molded plastic interior components for various automakers.
The layoff stems from the company’s decision to close the plant in order to get rid of excess capacity in its interiors business. The company would, however, retain 50 employees working at the plant, according to a notice with the Kentucky Division of Workforce and Employment Services.
Johnson Controls has been recently bested by China’s auto parts conglomerate Wanxiang Group Corp. in acquiring the assets of Waltham, Massachusetts based lithium-ion battery maker A123 Systems Inc. The company believed that the acquisition of A123 assets will strengthen its existing portfolio and help maintain the market leading position.
However, Wanxiang won the auction by offering $256.6 million for the assets of A123. The Chinese company bought A123’s automotive segment, energy-grid storage business, commercial business and U.S. government business. The sale included two facilities located in Livonia and Romulus in Michigan.
Johnson Controls, a Zacks #4 Rank (Sell) company, reported adjusted earnings per share of 77 cents for the fourth quarter of its fiscal year ended September 30, 2012, ahead of the Zacks Consensus Estimate of 75 cents and up 1.3% from 76 cents a year ago. Earnings were in line with the management expectation of 0% to 5% growth in the quarter.
Management believed earnings had favorable impacts from the improved profitability in Building Efficiency, Power Solutions and North America Automotive Experience businesses. However, these were offset by weak performance in automotive and buildings markets in Europe.
The company’s revenues for the quarter decreased 3.6% to $10.4 billion. It was marginally lower than the Zacks Consensus Estimate of $10.8 billion. However, excluding the impact of foreign exchange, revenues grew by 1% in the quarter.
The company has not provided any specific guidance for fiscal 2013. It expects that earnings in the first half of fiscal 2013 will be lower than the year ago period due to weak end markets and adverse effects of foreign currency.
However, it anticipates that earnings will be higher in the second half of fiscal 2013 compared to the year-ago period, driven by positive impact from restructuring activities. Meanwhile, earnings in fiscal 2013 are expected to be flat or a bit higher than fiscal 2012.
Johnson Controls is a supplier of automotive interiors, batteries and other control equipment. Its main competitors include Magna International Inc. (MGA - Analyst Report) in the Automotive Experience segment, Honeywell International Inc. (HON - Analyst Report) in the Building Efficiency segment and Exide Technologies (XIDE - Snapshot Report) in the Power Solutions segment.
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