In this Monday, April 4, 2011 file photo, new vehicles damaged by the March 11 tsunami waters are placed in a Toyota Motor Corp. parking lot at Sendai port, in Sendai, Miyagi Prefecture, northeastern Japan. Toyota Motor Corp. said Friday April 8, 2011, it will resume car production at all its plants in Japan at half capacity from April 18 to 27 after the March earthquake and tsunami forced it to halt manufacturing due to shortages of parts and power. (AP Photo/Eugene Hoshiko)Eugene Hoshiko/The Associated Press
Johnson Controls Inc., one of the world's largest auto suppliers, said a drop in auto production following last month's earthquake in Japan would cut earnings and revenue in its fiscal third quarter.
The company Monday forecast a $500-million (U.S.) drop in revenue in the third quarter, which ends in June, that would reduce profit by between 16 cents and 18 cents a share.
Johnson Controls forecast third-quarter profit between 51 cents and 53 cents a share. On average, analysts polled by Thomson Reuters I/B/E/S projected third-quarter profit of 67 cents a share.
The company's shares fell 3.5 per cent in morning trading on the New York Stock Exchange.
The drop in revenue assumes a 13-per-cent drop in North American auto output, Baird analyst David Leiker said in a research note. Japan production is expected to fall 50 per cent compared with the company's prior estimates, Mr. Leiker noted.
Johnson Controls said it expects to recoup those losses in the first half of its fiscal 2012 year, which begins in October.
Johnson Controls also posted second-quarter profit that edged out Wall Street estimates and lifted its revenue outlook for the 2011 fiscal year.
The company reported profit of $354-million, or 51 cents a share, up from $274-million, or 40 cents, a year earlier. Excluding one-time costs linked with acquisitions, the company earned 56 cents a share, slightly better than the average analyst estimate of 55 cents.
Revenue in the quarter rose 22 per cent to $10.14-billion.
A stronger euro and a 15-per-cent jump in revenue in its building-efficiency unit will boost Johnson Controls' 2011 revenue to $39.5-billion, the company said. This was $1-billion higher than its previous forecast of $38.5-billion.
The building-efficiency unit makes heating and ventilation systems for buildings.
The March 11 earthquake, tsunami and nuclear crisis in Japan has disrupted the supply of key auto parts and forced auto companies to shutter plants, forcing auto makers and suppliers to cut production.
Domestic production at Toyota Motor Co. plummeted 62.7 per cent in March, putting the world's largest auto maker at risk of losing its top spot to General Motors Co. and Volkswagen AG.