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UPDATE 2-Johnson Controls narrows full-year profit outlook
April 27, 2017 / 11:33 AM / 5 months ago

UPDATE 2-Johnson Controls narrows full-year profit outlook

* Cuts fiscal 2017 profit, organic sales forecast

* Q1 profit $0.50/shr vs est $0.49/shr

* Shares fall as much as 2.6 pct (Adds details, updates shares)

April 27 (Reuters) - Johnson Controls International Plc on Thursday narrowed its full-year profit and organic sales forecast, sending the shares of the multi-industry U.S. manufacturer down as much as 2.6 percent in morning trading.

The maker of automotive batteries and building heating systems said it now expects fiscal 2017 profit to be in the range of $2.60 to $2.68 compared with its previous forecast of $2.60 to $2.75.

Analysts on average were expecting fiscal 2017 earnings of $2.64 per share, according to Thomson Reuters I/B/E/S.

The company also cut its organic sales growth forecast for the full year to about 3 percent from its previous range of 2.5 percent to 4.5 percent.

Sales in the company’s building technologies and solutions unit, its biggest, rose 1 pct to $5.54 billion in the second quarter ended March 31, but margins fell due to higher expenses and an unfavorable product mix.

“Building margin expansion is such a critical part of the bull case – in fact it is the bull case – that this has to be viewed as a mark down on the quarter,” Morgan Stanley analyst Nigel Coe wrote in a note to clients.

The Cork, Ireland-based company’s shares were down 1.8 pct in morning trading.

Net income from continuing operations rose to $473 million, or 50 cents per share, in the second quarter, from $426 million, or 45 cents per share, a year earlier.

The company’s net sales rose 2.5 percent $7.24 billion.

Analysts had expected first-quarter earnings of 49 cents per share, on revenue of $7.09 billion. (Reporting by Radhika Rukmangadhan in Bengaluru; Editing by Maju Samuel and Shounak Dasgupta)

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