Strong shipments of stop-start batteries boosted Johnson Controls International’s performance in its fiscal third quarter.
Adjusted earnings before interest and taxes for the US tech giant’s Power Solutions division, which includes the lead-acid battery recycling business, rose 8.6% to $304 million for the three months to June 30 from $280 million in Q3 2016.
Revenue for the division rose 5.9% to $1.609 billion from $1.519 billion a year ago.
Higher lead costs and foreign exchange rate pressures weighed on earnings, chairman and CEO Alex Molinaroli said during a conference call, with global original equipment battery shipments and aftermarket battery shipments slipping 6% and 2% year-on-year, respectively.
However, strong demand in China and the Americas for stop-start batteries helped to counter the drop in unit volumes from these products and boosted stop-start battery shipments by 17% compared to the previous year.
Going forward, JCI is betting heavily on its absorbent glass mat (AGM) batteries, which are more durable than conventional lead-acid batteries, with stop-start systems. Last year, it announced plans to spend $780 million by 2020 to expand global production of such batteries.
Meanwhile, the company is still waiting for the demand for electric vehicles to pick up before investing in lithium-ion batteries.
• JCI’s net income rose 44.9% year-on-year to $555 million from $383 million in Q3 2016.
