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Johnson Controls forecasts 2014 earnings below estimates

Wednesday, 18 Dec 2013 | 9:44 AM ET

Dec 18 (Reuters) - Johnson Controls Inc forecast lower 2014 earnings than analysts were expecting as it plans to buy and sell assets to reduce dependence on the low-margin automotive sector in favor of its power business.

Shares of Johnson Controls, the largest U.S. auto parts maker, fell as much as 1.5 percent in early trading on Wednesday.

Johnson Controls forecast 2014 earnings between $3.15 and $3.30 per share, below the average analyst estimate of $3.31 per share, according to Thomson Reuters I/B/E/S.

The company said it expected revenue of $43.8 billion next year, slightly below the average analyst estimate of $43.87 billion.

Milwaukee-based Johnson Controls makes car interiors and batteries as well as heating, cooling and ventilation systems for buildings.

The company said in October that it would explore strategic options for its loss-making automotive interiors business to focus instead on its automotive battery line and power management systems.

Johnson Controls also sold part of its automotive electronics business this year to Gentex Corp for about $700 million.

The company said on Wednesday it aimed to rebalance its businesses to earn higher valuations and reduce dependence on the automotive sector.

"This involves expectations of both acquisitions and divestitures, using rigorous assessments of what are the best financial cases and where we believe we can win," Chief Executive Alex Molinaroli said in a statement.

The company gave no further details of the businesses it might look to sell or acquire. Distinct from the car interiors and electronics businesses, the company's automotive battery business is part of its power solutions unit.

Johnson Controls said it expected sales from its power solutions unit to increase 7-8 percent in 2014.

Sales from its automotive electronics business are expected to fall 2.5-3 percent in 2014, and sales from its interiors business are expected to be flat to down 1.5 percent.

Johnson Control shares were trading at $50.57 in early trading on the New York Stock Exchange.

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