JC plans spinoff of automotive interiors unit

CI is trading at $46.65, up $0.31 or 0.67 percent on a volume of 927,055 shares LEA is trading at $103.47, up $4.48 or 4.53 percent on a volume of 632,045 shares. Nine analysts surveyed by Zacks expected $9.59 billion.

“This is a great opportunity for our Automotive Experience business to further its position as the global leader in automotive seating and interiors”, said Alex Molinaroli, chairman and chief executive officer of Johnson Controls.

For the last month, Johnson Controls has talked about either selling or spinning-off its auto seat business.

For fiscal 2015, Johnson Controls reiterated its outlook for expectations for segment margin improvements in all three of its businesses.

Last year, Johnson Controls combined its interior trim unit into a venture with Yanfeng Automotive Trim Systems Co. of Shanghai.

Johnson Controls Inc. (NYSE:JCI) reported that its net income attributable to the company for the third-quarter increased to $178 million from the prior year’s $176 million, with earnings per share improving to $0.27 from $0.26 in the previous year. The share price can be expected to fluctuate from the mean short term target, can be seen from the standard deviation reading of $5.82.

In preparation for the spinoff, the company said it would initiate a cost-savings program.

The company had guided for 90 to 92 cents in adjusted earnings per share. JCI does not provide details on its molding, but in 2008, when it took over manufacturing from former bankrupt supplier Plastech Engineered Products Inc., it had an estimated $1.2 billion plastics business, most of it in injection molding. There are two lines under the automotive experience umbrella: seating and interiors. Excluding foreign exchange effects, sales rose 5%, the company said. The Building Efficiency business is engaged in designing, producing, marketing and installing heating, ventilating and air conditioning (HVAC) systems, building management systems, controls, security and mechanical equipment.

The move is the Milwaukee company’s latest in its shift from lower-margin automotive parts businesses.

The to-be-separated automotive experience business, meanwhile, posted 19% profit growth, though revenue declined 6% because of currency fluctuations. “At the same time, Johnson Controls will move forward with our multi-industrial strategies and make investments in our core growth platforms around buildings and energy storage”.

Seating segment sales rose 4 percent from the year-ago period to $3.6 billion, reflecting the acquisition of Eagle Ottawa.