Johnson Controls Inc. swung to a loss in its fourth quarter amid costs linked to the spinoff of its auto-parts business, Aident, and its merger with Tyco International PLC, though revenue and adjusted earnings exceeded expectations.
For the quarter the company took a tax hit of $1.1 billion, mostly due to the Adient split. There was an additional $239 million in transaction, integration and separation costs related to Adient and Tyco.
For the quarter ended September, the company posted a loss of $1.17 billion, or $1.61 a share, down from profit of $349 million, or 53 cents a share, a year earlier. Adjusted earnings were $1.21 a share, compared with $1.04 last year.
Revenue was $10.2 billion, up 16.6% from a year ago. The Tyco merger was completed on Sept. 2, adding one month of the Tyco results into the quarter including sales of $800 million.
The company had expected adjusted earnings between $1.17 and $1.20, while analysts had expected $1.06 in per-share earnings on $9.40 billion in revenue.
Shares of the company were up 1.4% premarket to $42.21
Johnson Controls agreed to a $14 billion merger with Tyco in January. Under the agreement's terms. Johnson Controls shareholders will own a slight majority at 56% of the combined company.
The new headquarters will be in Cork, Ireland, effectively completing a so-called inversion for Johnson Controls, a tactic used by some to take advantage of lower corporate tax rates in other countries. The combined company would be a giant provider of commercial-building systems.
Johnson Controls decided to spin off the bulk of its automotive parts business as part of the Tyco merger to focus on heating and air-conditioning equipment and car batteries.
For the year, the company reported adjusted earnings on a per-share basis of $3.98, at the high end of guidance of $3.95 to $3.98. Analysts had expected $3.90.
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(END) Dow Jones Newswires
November 08, 2016 09:35 ET (14:35 GMT)
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