Johnson Controls, Inc. is crediting its exposure to global markets and focus on cost and quality improvements as the main factor behind record sales and income for the first quarter of fiscal 2008. The company recently reported diluted earnings per share from continuing operations increasing 39 percent to $0.39 from $0.28 last year, and reconfirmed its October earnings guidance of 18 percent year-over-year growth. "We continue to deliver record results with strength in both the domestic markets as well as higher growth international markets," says Stephen A. Roell, the company's chairman and chief executive officer. "Building efficiency continues to generate double-digit sales and earnings improvements and automotive experience profitability is increasing as planned. We believe we are on track to achieve another year of strong sales and earnings growth." Sales for the quarter ended Dec. 31, 2007 rose 16 percent to a record $9.5 billion from $8.2 billion last year, reflecting growth by all three businesses. Segment income was $374 million, up 25 percent from $300 million in the 2007 quarter, as a result of the higher volume and margin expansion. Income from continuing operations was $235 million, 40 percent higher than the prior year's $168 million due to the higher segment income and a lower effective tax rate. Automotive experience sales for the first quarter of 2008 totaled $4.6 billion, up 9 percent from $4.2 billion. Revenues in Europe increased 14 percent while North American sales were 5 percent higher. Industry light vehicle production in Western Europe and North America was approximately 5 percent and 1 percent higher, respectively, than the prior year amounts. Unconsolidated sales in China increased over 40 percent reflecting the strong vehicle production environment and new business. Segment income more than doubled to $78 million versus $35 million for the prior year quarter. In North America, income increased to $10 million from a loss of $52 million a year ago due to operational efficiencies and improved pricing. Building efficiency sales increased 11 percent to $3.2 billion from $2.9 billion due to increased global demand for the company's offerings for nonresidential buildings that improve energy efficiency and reduce greenhouse gas emissions. The company reported strong revenue increases for its systems, services and global workplace solutions revenues. Segment income increased 33 percent to $163 million from $123 million in 2007, due to the higher global volumes and operational efficiencies. The backlog of uncompleted contracts at Dec. 31, 2007 was $4.4 billion, up 13 percent versus the previous year, reflecting strong demand in domestic and international markets. Power solutions sales were up 55 percent to $1.7 billion from $1.1 billion. The increase was primarily due to higher prices resulting from the pass-through of increased lead costs, as well as increased unit shipments. Segment income decreased 6 percent to $133 million from $142 million in the 2007 quarter, which included a one-time benefit of $11 million. Income in the 2008 quarter was impacted by additional investments in the company's hybrid vehicle battery capabilities. Johnson Controls is expected to launch production of the industry's first lithium-ion battery systems later in the year. The fiscal 2008 full-year earnings outlook provided by the company on Oct. 9, 2007 remains unchanged. The company forecasts revenues increasing 10 percent to about $38 billion with diluted earnings per share from continuing operations increasing approximately 18 percent to $2.45 - $2.50. For the second quarter of fiscal 2008, the company forecasts diluted earnings per share from continuing operations of $0.46 - $0.48, up from $0.44 in the prior year which included non-recurring tax benefits. Excluding the benefits, earnings per share in the 2007 second quarter were $0.37. Johnson Controls said it expects strong earnings increases in all three of its businesses. Mr. Roell adds, "The company continues to benefit from its business diversification and by bringing new value to our customers. We are increasing our investments in globalization and new enhanced technologies while ensuring we continue to improve our cost base. Our first quarter results represent a strong start to our fiscal year, and with the earnings visibility we have for our three businesses, we are confident in our full-year earnings guidance." For more information about Johnson Controls, visit the company's Web site. | 
