Johnson Controls: Focus on fundamentals to sustain growth in difficult time

Johnson Controls Inc. (JCI) has come under tremendous pressure due to an unprecedented slowdown in its two major markets; automotive and construction. The company was caught off-guard by a greater than anticipated decline in vehicle sales in North America and Europe. JCI withdrew its 2009 outlook amid uncertainty, reported first quarterly loss in 19 years and witnessed a downgrade in investment ratings by all three rating agencies

First quarterly loss in two decadesJCI reported its first quarterly net loss of US$608m in 19 years on one-time impairment charges of US$562m. Excluding this non-recurrent charge, net loss was US$82m. The company witnessed a 23% decline in sales to US$7.3bn. Sales declined in all three business divisions; Automotive Experience, Building Efficiency and Power Solutions; as its major markets, automotive and construction, further deteriorated.