Business

Johnson Controls pins loss on auto slump

NEW YORK — Johnson Controls Inc., which makes building and automotive systems, said Friday it lost $608 million in its fiscal first quarter and warned that it expects a loss for this quarter, blaming the continued downturn in automotive and construction markets that spread from the United States to other key markets around the world.

The first-quarter results were significantly worse than Wall Street projected, sending Johnson Controls shares down $1.18, or 6.9 percent, to $15.91 in afternoon trading.

Stephen A. Roell, the company's chairman and chief executive, said the quarter, which was marked by drops in U.S. and European vehicle sales not seen for decades, was a tough one not only for Johnson Controls but also the entire industry.

"It became more apparent and evident as we went through the quarter that the depth and duration of the U.S. economic slowdown and recession was going to be greater than we initially had expected, as well as the fact it extended into the global markets," Roell told analysts on a conference call.

The Milwaukee-based company said its loss amounted to $1.02 per share. That contrasts with a profit of $235 million, or 39 cents per share, in the prior-year quarter.

Johnson Controls said it expects to report a second-quarter loss similar to the first quarter's operating loss. The forecast is based on an expected 46 percent drop in U.S. automotive production for the quarter and a 30 percent drop in European production for the year, company officials said.

Late last year, Johnson Controls warned that it expected to post a loss for the quarter, blaming a steep drop in demand. The warning came just months after Johnson Controls announced a restructuring plan designed to slash costs by consolidating plants and eliminating jobs.

Most U.S.-based auto suppliers have seen their sales tumble this year as a result of severe production cutbacks at the automakers.

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