Stock of the Day
|
Johnson Controls (JCI)
Johnson Controls Announces More Job Cuts and Plant Closings
Johnson Controls Inc. is a manufacturing company, and one of the largest producers of automobile interiors, batteries, and other car parts. Because of that, it's not so surprising that the company's success or failure is tied to some degree to the performance of the auto industry and automobile sales. So when Johnson Controls issued a report this morning, the news wasn't too shocking. News in the auto industry is pretty grim, and as things look rough for Johnson Controls, what is giving them hope of turning their losses into profit?
|
| Daily Chart |
If you are not able to see the chart, your email client probably does not support javascript. To view it, please click here
|
| Stock Analysis |
The company is nearing the end of its fiscal second quarter (which ends this upcoming Tuesday), and is already in the midst of an almost $500 million restructuring program. The existing program was announced last year, and includes almost 5,000 job cuts, as well as 18 plant closures. As automobile production has been falling (currently hitting 27 year lows), so has the company's earnings. In December 2008, the company reported a $608 million loss, experiencing a quarterly loss for the first time since 1992.
|
This morning, the company announced a second restructuring program. This one is estimated to cost up to $215 million, and will close 10 manufacturing plants, mostly in Europe. The number of job cuts was not specified, but it is hypothesized to be proportional to the number of cuts generated from the first restructuring. The company is hoping to complete the first restructuring by the end of this fiscal year, and finish the second restructuring by the end of the next fiscal year. The company has additionally stated that they do not intend to announce any additional restructuring programs in the near future.
|
The company will report their second quarter earnings on April 21. The company expects another loss for this quarter, but is hoping that as they finish up the first restructuring, that they will return to a yearly profit by the end of this fiscal year. There is a chance that the news is overly optimistic, as the company also announced this morning that they have reduced their production forecast for the upcoming year. However, the company seems positive that the changes they are making will push the company in the right direction, at least by the end of the year. Johnson Control's stock has fallen since this morning's announcement, but only the changes in the upcoming months will truly speak to the success or failure of these programs.
|
Profile |
Click here to view a detailed profile of Johnson Controls.
|
|
|
|
|
