Market Commentary and Intraday News
Fitch lowers ratings outlook on Johnson Controls
262 days ago
(AP:CHICAGO) Fitch Ratings lowered its outlook for Johnson Controls Inc. to "Negative" from "Stable" Friday, citing increased concerns about the auto parts and building equipment maker's negative free cash flow, higher debt and leverage and other areas.
Fitch said the uncertain global economic outlook could pressure revenue and profit margins and delay any significant improvement in the Milwaukee-based company's credit metrics.
Its other rating concerns include low margins in the auto parts and building equipment units, weak construction markets, difficult conditions in Europe and volatile prices for lead and other raw materials.
In July, Johnson Controls posted disappointing fiscal third-quarter results and slashed its sales growth prediction for the current quarter. It said sluggish demand in key markets and a much weaker euro had caused revenue to be less than expected.
Fitch said it anticipates that the company's operating performance could improve over the long term as it benefits from integrating its businesses and as construction markets eventually recover.
The ratings agency affirmed its "BBB+" issuer default ratings and long-term ratings for Johnson Controls.
Shares in Johnson Controls rose 6 cents to $27.21 in afternoon trading. Over the past year, shares have traded between $23.37 and $35.95.
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