Johnson Controls Inc. (JCI - Free Report) completed the divestiture of its HomeLink business to Zeeland, MI-based Gentex Corp. (GNTX - Free Report) . Johnson had announced its intentions of selling the entire automotive electronics business earlier this year, following which, the sale of HomeLink business was announced in July.
HomeLink is a vehicle-based control system, which helps drivers to trigger garage door openers, entry door locks, home lighting, security systems, entry gates, and other radio frequency convenience products from a distance. Gentex’s automatic-dimming rearview mirrors have been using the HomeLink system for about 10 years.
The purchase consideration, including adjustments of all HomeLink assets, intellectual property and testing facilities, amounted to $700 million.
Johnson Controls’ plan of selling the rest of its automotive electronics business is progressing well, with a high interest from many strategic buyers. The company expects that it will complete the bid of selling the process by the end of 2013.
Johnson Controls posted a roughly 18% rise in profits to $535 million or 78 cents per share in the third quarter of its fiscal year ended June 30, 2013 from $455 million or 66 cents in the comparable quarter of prior year, all excluding non-recurring items. With this, earnings per share beat the Zacks Consensus Estimate as well as the management’s own expectation by 3 cents.
Johnson Controls believes that double-digit rise in segment income in all three businesses and quarter-over-quarter improvements in earnings in the company’s automotive business in Europe are the main factors behind earnings growth in the quarter.
Revenues in the quarter rose 2% to $10.8 billion during the quarter. However, it missed the Zacks Consensus Estimate of $11.0 billion.
Johnson Controls is a supplier of automotive interiors, batteries and other control equipment. Gentex Corporation is a supplier of high-quality products to the worldwide automotive industry and North American fire protection market. The company develops proprietary electro-optic products. Currently, both Johnson Controls and Gentex retain a Zacks Rank #3 (Hold).
Other stocks that are performing well in the industry where JCI operates include Fuel Systems Solutions, Inc. , and American Axle & Manufacturing Holdings Inc. (AXL - Free Report) . Both the companies carry a Zacks Rank #1 (Strong Buy).