Tuesday, June 10, 2014

Is Johnson Controls a Buy?

It's rare that someone can point to a company that has just delivered an increase in quarterly earnings of more than 50% and say that its results were "mixed," but that's exactly the case with Johnson Controls Inc.  . Its automotive-based segments gave mixed results, while its construction-based segment's results were disappointing. Moreover, its guidance for the construction industry was somewhat at odds with what rivals like Lennox International   and Ingersoll-Rand  reported. But there is a lot to like about the company, and investors should follow the current share price decline with a lot of interest.

What investors were expecting from Johnson Controls
The company reports results within three separate segments, and a look at its segmental income for the first half reveals how it makes money. For ease of reference, its power solutions business is a leading supplier of automotive batteries, automotive experience sells automotive finishing (seating, interiors, etc.), and building efficiency sells heating, ventilation, and air conditioning, or HVAC, solutions.