S&P analyst Efraim Levy estimates that Johnson Controls (JCI), which specializes in auto interiors, building efficiencies and vehicle batteries -- especially lead acid batteries, but also increasingly lithium batteries -- will see revenue rise by 10% in fiscal 2011, owing to an increase in vehicles sales and production in the U.S. and most other regions. Levy said battery sales will advance at the fastest pace, while the building efficiency unit will add on more customers over in the longer-term. The company should also benefit from greater business from emerging market auto OEM customers, said Levy in an equity research report.
The analyst also expects to see improved operating margins in fiscal 2011 owing to the stronger domestic and foreign demand, benefits from restructuring activities and a reduction in restructuring costs. "We expect JCI's long-term sales and earnings growth to exceed that of peers, and for the company to show greater earnings stability, aided by its diversification in geography, products and customers," Levy noted.
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