The Zacks Analyst Blog Highlights: Johnson Controls, Magna International, Honeywell International, Exide Technologies and Boeing

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Dec 12, 2012, 09:30 ET

CHICAGO, Dec. 12, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Johnson Controls Inc. (NYSE:JCI), Magna International Inc. (NYSE:MGA), Honeywell International Inc. (NYSE:HON), Exide Technologies (Nasdaq:XIDE) and The Boeing Company (NYSE:BA).

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Here are highlights from Tuesday's Analyst Blog:

Johnson Controls Laying Off Nearly 400

Johnson Controls Inc. (NYSE:JCI) plans to lay-off 392 workers at its Johnson Controls Interior Manufacturing (JCIM) plant, located in National Turnpike in Louisville, Kentucky. The plant is in operation from 1999 and manufactures injection-molded plastic interior components for various automakers.

The layoff stems from the company's decision to close the plant in order to get rid of excess capacity in its interiors business. The company would, however, retain 50 employees working at the plant, according to a notice with the Kentucky Division of Workforce and Employment Services.

Johnson Controls has been recently bested by China's auto parts conglomerate Wanxiang Group Corp. in acquiring the assets of Waltham, Massachusetts based lithium-ion battery maker A123 Systems Inc. The company believed that the acquisition of A123 assets will strengthen its existing portfolio and help maintain the market leading position.

However, Wanxiang won the auction by offering $256.6 million for the assets of A123. The Chinese company bought A123's automotive segment, energy-grid storage business, commercial business and U.S. government business. The sale included two facilities located in Livonia and Romulus in Michigan.

Johnson Controls, a Zacks #4 Rank (Sell) company, reported adjusted earnings per share of 77 cents for the fourth quarter of its fiscal year ended September 30, 2012, ahead of the Zacks Consensus Estimate of 75 cents and up 1.3% from 76 cents a year ago. Earnings were in line with the management expectation of 0% to 5% growth in the quarter.

Management believed earnings had favorable impacts from the improved profitability in Building Efficiency, Power Solutions and North America Automotive Experience businesses. However, these were offset by weak performance in automotive and buildings markets in Europe.

The company's revenues for the quarter decreased 3.6% to $10.4 billion. It was marginally lower than the Zacks Consensus Estimate of $10.8 billion. However, excluding the impact of foreign exchange, revenues grew by 1% in the quarter.

The company has not provided any specific guidance for fiscal 2013. It expects that earnings in the first half of fiscal 2013 will be lower than the year ago period due to weak end markets and adverse effects of foreign currency.

However, it anticipates that earnings will be higher in the second half of fiscal 2013 compared to the year-ago period, driven by positive impact from restructuring activities. Meanwhile, earnings in fiscal 2013 are expected to be flat or a bit higher than fiscal 2012.

Johnson Controls is a supplier of automotive interiors, batteries and other control equipment. Its main competitors include Magna International Inc. (NYSE:MGA) in the Automotive Experience segment, Honeywell International Inc. (NYSE:HON) in the Building Efficiency segment and Exide Technologies (Nasdaq:XIDE) in the Power Solutions segment.

Boeing: $4.7B Deal with Turkish Airlines

The Boeing Company (NYSE:BA) has received an order from Turkish Airlines for 15 777-300 Extended Range ("ER") airplanes. The order worth $4.7 billion at list prices includes options for five additional 777-300ERs.

The Turkish Airlines had made the commitment in October 2012. Currently, the Turkish Airlines' fleet includes 12 777-300ERs.

The Boeing 777 is the world's most successful twin-engine, long-haul airplane. It produces 22% less carbon dioxide per seat and costs 20% less to operate per seat. The Boeing 777-300 ER is the longer range version of the Boeing 777-300. It is powered by the world's most powerful turbofan engines. The modified extended range includes the most powerful engine, the GE90-115B, ever produced. The aircraft is also equipped with raked wingtips, additional fuel tanks, strengthened main landing gear and fuselage and a higher Maximum Take-off Weight. The 386 seater airplane in a three-class configuration has a maximum range of 7,930 nautical miles.

Recently in October, the company had increased the production rate for Boeing 777 from 7 per month to 8.3 per month. The company has implemented new technologies in order to achieve the highest production rate. The increase reflects the increased demand for the airplane.

Boeing is popular amongst various airlines for its excellent aircrafts. Turkish Airlines currently operates a fleet that includes nearly 100 Boeing airplanes. Moreover, in November, the company has received an order, worth $4.9 billion, for 23 737-800s and 31 737 MAX 8s from SilkAir.

Boeing's revenue exposure is spread across more than 90 countries around the globe. Due to the continuing recovery of the global economy, demand for Boeing's Commercial Airplanes is benefiting from a steady improvement in passenger and freight traffic. Overall, we expect the growth momentum to be maintained by its order backlog, planned production rate increases and a globally diversified customer base.

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