Johnson Controls Inc. (JCI) announced that it has completed a public offering of $1.1 billion worth of fixed-rate senior notes. The company will use the net proceeds of about $1.09 billion for repaying short-term debt and funding general corporate purposes.
The notes include $400 million of senior notes that mature in 2016 and bear an interest rate of 2.6%, $450 million of senior notes that mature in 2021 and bear an interest rate of 3.75% and $250 million of senior notes that mature in 2041 and bear an interest rate of 5.25%.
The public offering’s underwriters include Barclays Capital Inc., Citigroup Global Markets Inc., Banca IMI SpA., Credit Agricole Securities Inc. and J.P. Morgan Securities LLC.
During the quarter ended March 31, 2011, Johnson Controls retired $654 million worth of 5.25% fixed rate notes that matured on January 15, 2011.
Last month, Johnson Controls announced a hike in quarterly cash dividend from 16 cents to 18 cents per share. The company last raised its dividend by 3 cents to 16 cents per share in the first quarter of its fiscal year ended December 31, 2010. Before that, the company had paid dividend of 13 cents per share since 2008.
In the fourth quarter of its fiscal year ended September 30, 2011, the Zacks #3 Rank (Hold) company posted a 25% increase in profit to 75 cents per share from 60 cents per share in the same quarter of the prior fiscal year (all excluding non-recurring items).
However, the profit was lower than the Zacks Consensus Estimate by a penny. In absolute terms, profit was $514 million versus $409 million in the fourth quarter of 2010 (all excluding non-recurring items).
Net sales in the quarter appreciated 19% to $10.8 billion, which is higher than the Zacks Consensus Estimate of $10.7 billion. The improvement in sales and earnings was attributable to impressive growth in the company’s businesses.
Johnson Controls reiterated its financial guidance for fiscal 2012 issued on October 12, 2011. The company expects sales to increase by 8% to $44.2 billion. The projection was based on modestly higher global automotive production, growth across the company’s businesses in emerging markets, and market share gains. It also anticipates earnings to increase to $2.85–$3.00 per share for the year.
Johnson’s competitor, Magna International Inc. (MGA), reported earnings of $226 million or 94 cents per share compared with $256 million or $1.10 per share a year ago. It was lower than the Zacks Consensus Estimate of $1.01 per share.
The company’s revenues in the quarter rose 21% year over year to $6.97 billion driven by higher sales across all its operations. Gross profit improved 2% to $769 million, despite a 24% rise in cost of goods sold to $6.20 billion. However, gross profit, as a percentage of sales, dropped to 11.0% from 13.1% in the third quarter of 2010.
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