What was the primary driver of the large net loss in this quarter?

The primary driver of the substantial net loss of $2.57 billion was a significant goodwill and intangible asset impairment charge of $2.6 billion, stemming from deteriorating business conditions and downward revisions to future financial forecasts.

How did foreign currency fluctuations impact the company's results?

Unfavorable foreign currency exchange rate movements significantly impacted the company's reported results. For the quarter, these movements negatively affected net revenue by $494 million and operating income by $10 million. For the six-month period, the negative impact on net revenue was $917 million and on operating income was positive $57 million.

What is the company doing to address the current economic downturn?

The company is implementing cost containment actions across all businesses and corporate functions. It is also pursuing restructuring activities with expected charges of approximately $200 million in fiscal year 2009 to achieve cost savings and strengthen its competitive position.

What is the company's outlook for acquisitions?

The company expects to remain active in making bolt-on acquisitions, strategically assessing businesses that fit within its existing framework. An example is the recent acquisition of Vue Technology, Inc. for $43 million.

JCI 10-Q Quarterly Report Q2 FY2009 — Revenue, Net Income, EPS

Summary

Johnson Controls International plc (JCI) reported a significant net loss of $2.57 billion for the quarter ended March 27, 2009. This substantial loss was heavily influenced by a goodwill and intangible asset impairment charge of $2.6 billion. Excluding these charges, the company's operating performance was also down year-over-year, with net revenue declining by 14.7% to $4.15 billion. The decline in revenue was attributed to unfavorable foreign currency movements, a slowdown in commercial markets, particularly in the retail sector, and a decrease in sales volume in the Electrical and Metal Products segment. Despite the significant impairment and revenue decline, the company is undertaking restructuring activities expected to yield cost savings. Management highlighted the acquisition of Vue Technology, Inc. as a strategic move to bolster its technology portfolio. The company maintained its liquidity through available cash and credit facilities, while also managing its debt levels.

Financial Highlights

31 data points

Beta

Revenue

$4.07B

0.3% Gross Margin

Net Income

-$2.57B

-0.6% Net Margin

EPS (Diluted)

$-5.42

Cash & Equivalents

$1.42B

Free Cash Flow

$726.00M

Financial Statements

Beta

Revenue	$4.07B
Cost of Revenue	$1.86B
Gross Profit	$1.42B
SG&A Expenses	$1.20B
Operating Income	-$2.55B
Interest Expense	$78.00M
Net Income	-$2.57B
EPS (Basic)	$-5.42
EPS (Diluted)	$-5.42
Shares Outstanding (Basic)	473.00M
Shares Outstanding (Diluted)	473.00M

Key Highlights

1Net loss of $2.57 billion for the quarter, significantly impacted by $2.6 billion in goodwill and intangible asset impairment charges.
2Net revenue decreased by 14.7% to $4.15 billion, primarily due to unfavorable foreign currency exchange rates and a slowdown in commercial markets.
3All operating segments reported declines in operating income.
4Significant declines were noted in the ADT Worldwide, Electrical and Metal Products, and Safety Products segments, driven by market conditions and impairment charges.
5The company is implementing restructuring activities to achieve cost savings, expecting approximately $200 million in charges in fiscal year 2009.
6Acquired Vue Technology, Inc. for $43 million to strengthen its Safety Products segment's technology portfolio.
7Maintained liquidity with $1.42 billion in cash and cash equivalents and access to revolving credit facilities.

Johnson Controls International plc Quarterly Report for Q2 Ended Mar 27, 2009

Summary

Financial Highlights

Key Highlights

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