The struggling U.S. auto industry is hurting Glendale-based Johnson Controls Inc. The company today reported a loss of $193 million, or 33 cents per diluted share, for the second quarter of the 2009 fiscal year, down from a profit of $289 million, or 48 cents per diluted share, for the second quarter of 2008.
The company had net sales of $6.3 billion for the second quarter of 2009, down from $9.4 billion of sales for the second quarter of 2008.
The second quarter 2009 results include restructuring charges of $230 million ($185 million net of tax), $81 million in non-recurring tax benefits and a $7 million tax benefit resulting from the increase in the first quarter effective tax rate from 24 percent to 31 percent. Excluding these items, the loss in the quarter was 16 cents per diluted share, the company said.
"As we indicated three months ago, the second fiscal quarter was going to be challenging due to the depressed automotive production volumes. During the quarter, we implemented additional cost reduction initiatives and actions to enhance our liquidity position," said Stephen A. Roell, Johnson Controls chairman and chief executive officer. "We started to see improvements in the financial performance of our Automotive Experience business toward the end of the second quarter, and we expect significantly lower operating losses in the third quarter. We believe the automotive improvement, combined with the solid profitability of our Building Efficiency and Power Solutions businesses, will enable us to report positive earnings for the remainder of 2009."
The company's Building Efficiency division reported segment income of $90 million in the second quarter of fiscal 2009 compared to $177 million in 2008. Building Efficiency division sales in the 2009 second quarter were $3.0 billion, down 10 percent from $3.3 billion for the second quarter last year. However, due to its high concentration in the institutional buildings market, the company reported that its backlog of uncompleted contracts in the second quarter was $4.5 billion, up 1 percent compared to the previous year.
Power Solutions segment income was $66 million in the second quarter, down 46% from $121 million last year. Power Solutions sales in the second quarter were $905 million, down 38 percent from $1.5 billion in the year ago period.
The Automotive Experience segment reported a loss of $275 million in the quarter versus a profit of $155 million in the 2008 period. Automotive Experience sales in the quarter declined 47 percent to $2.4 billion versus $4.7 billion last year.
"While there are still many uncertainties in the global economy, we continue to believe we are positioned to report profitable financial results in the future," Roell said.

Job losses around the world during the global recession have resulted in substantially lower demand for employment services. As a result Milwaukee-based Manpower Inc. saw its first quarter profit plunge 97 percent.
The company today announced first quarter profit of $2.3 million, or 3 cents per diluted share, down from $75.5 million, or 94 cents per diluted share, for the first quarter of 2008. Revenues for the first quarter were $3.6 billion, a decrease of 32 percent from the first quarter of 2008.
"The continued deterioration of the labor markets throughout the world has put pressure on our profitability," said Jeffrey A. Joerres, Manpower Inc.'s chairman and chief executive officer. "Our team has performed well in reducing our operating costs, while at the same time maintaining the appropriate geographical presence. We anticipate that, despite the difficult economic environment, we will maintain profitability in the second quarter."

Despite lower sales, Milwaukee-based Badger Meter Inc. today reported higher first quarter profits.
The company said it had first quarter net earnings of $6.973 million, or 47 cents diluted earnings per share, up 15.8 percent from $6.02 million, or 41 cents diluted earnings per share, for the first quarter of 2008. That is the highest first quarter net earnings ever for the company
“Our ability to achieve record first quarter earnings and earnings per share on lower sales reflects the impact of ongoing cost reduction initiatives, favorable copper costs and the strength of the dollar, compared to the first quarter of last year," said Richard A. Meeusen, chairman, president and chief executive officer of Badger Meter. "Our gross profit margin increased to 40.1 percent for the first quarter of 2009, compared to 35.8 percent in the first quarter of 2008.”
However, the company had $65.324 million in net sales for the first quarter, down 4.5 percent compared to net sales of $68.42 million for the first quarter of 2008. Meeusen said the lower first quarter sales were due entirely to the decline in sales of the company’s industrial products as a result of the current economic recession. Sales of the company’s industrial products decreased nearly 29 percent for the first quarter of 2009 compared to the same quarter last year. Sales of utility products, which account for 86 percent of total Badger Meter sales, were up 1.1 percent for the first quarter of 2009.
“Sales of our three advanced meter reading technologies for the utility market continued to increase in the first quarter. Sales of commercial water meters were lower in the first quarter of 2009 than in the same quarter a year ago, due to a number of large orders for these products in the first quarter of 2008,” said Meeusen. “The decrease in industrial product sales was across all product lines and in all geographic areas. We are taking appropriate actions to further reduce costs in response to the downturn in these markets. On the utility side, we have not seen a significant impact from the current economic environment, although we continue to watch this market very closely. While we are facing difficult comparisons against last year’s record sales in all four quarters, we expect that our margins will benefit from the lower commodities prices and stronger dollar through the remainder of 2009. Long term, we believe the fundamentals of automatic meter reading and the increasing need for water conservation will continue to drive our future growth."

Lower sales of products to customers in the mega yacht, oil and gas, and industrial markets resulted in a big drop in third quarter profit for Racine-based Twin Disc Inc.
The company today reported net earnings of $2.85 million, or 26 cents per diluted share, for the third quarter of fiscal year 2009, down 64 percent from third quarter 2008 net earnings of $7.929 million, or 70 cents per diluted share.
For the first three quarters of the fiscal year, the company's net earnings are $8.748 million, or 78 cents per diluted share, down 49 percent from net earnings of $17.243 million, or $1.51 per diluted share, for the first quarter quarters of fiscal 2008.
Sales for the fiscal 2009 third quarter were $69,292,000, compared to $85,838,000 for the fiscal 2008 third quarter. Year-to-date, sales were $223,562,000 compared to $241,345,000 for the fiscal 2008 nine months.
The company said that the decline in sales for the fiscal 2009 third quarter was primarily due to lower sales of products to customers in the mega yacht, oil and gas, and industrial markets. This was partially offset by higher sales to customers in the commercial marine, land-based military and airport rescue fire fighting markets, the company said.
“Going into the third quarter, we knew that Twin Disc was not immune from the challenges facing the global economy and while we saw signs of softening in certain markets as early as the first quarter, our overall business remained firm," said Michael E. Batten, chairman and chief executive officer of Twin Disc. "However, beginning in February and accelerating during the remainder of the third quarter, we experienced significant slowdown in volumes and orders throughout certain markets such as the mega yacht and industrial markets that we had not experienced during the fiscal 2009 first half. As the slowdown developed in these markets, we began the process of aligning our global cost structure with perceived business levels, which included slowing production primarily at our European operations, which are closely tied to the mega yacht marine markets and adjusting our inventory and employee levels at our subsidiaries. We will continue to take the appropriate actions to manage our cost structure and maintain a level of profitability that we feel the company can achieve despite slowing sales. Our diverse and niche market focus has helped somewhat insulate Twin Disc from the impacts of the global slowdown as certain of our markets experienced growth during the third quarter. Sales to military and commercial marine customers were up during the quarter, and while orders have slowed, they have not experienced, nor do we anticipate them to experience, the accelerated level of decline that we saw in the mega yacht marine markets. Our military business, both for land-based transmissions and marine propulsion systems, continues to perform to our expectations and we expect this to carry on for the foreseeable future. Most importantly, we continue to plan for the future. We are optimistic that once the global economy stabilizes we will have many competitive and financial advantages to offer both our existing customers and new customers."

Weathering the storm during the recession and financial industry crisis, Minneapolis-based U.S. Bancorp's first quarter profit is up 60.3 percent compared to the fourth quarter of 2008.
U.S. Bank, which has substantial Wisconsin operations, today reported first quarter net income of $529 million, up 60.3 percent compared to fourth quarter of 2008 net income of $330 million. However, the company's first quarter profit is still down 51.5 percent to first quarter 2008 net income of $1.09 billion.
Diluted earnings per share for the first quarter were 24 cents, down from 62 cents in the first quarter of 2008, but an improvement from 15 cents in the fourth quarter of 2008.
“I am very proud of U.S. Bancorp’s first quarter results, said chairman, president and CEO Richard K. Davis. "These results clearly demonstrated our company’s ability to produce strong core operating earnings despite a very challenging economic environment. The first quarter 2009 earnings included record total net revenue, aided by record-setting activity in our mortgage banking division, including both loan production and fee revenue. In addition, the company enjoyed a continuing 'flight to quality' as evidenced by strong loan and deposit growth over the same quarter of 2008 and the prior quarter. The related growth in net interest income and fees from the business line activities, combined with controlled expense levels in the first quarter, led to positive core operating leverage on a year-over-year and linked quarter basis. Offsetting these positive results were, as expected, higher credit costs and additional market-related write-downs, as well as lower fee revenue in certain line items that are closely linked to the slower economy and current equity market conditions. Overall, however, our results showed the distinct advantage of our company’s diversified revenue stream and mix of businesses. Further, our strong balance sheet growth demonstrated that U.S. Bank remains positioned to respond to the borrowing needs of its customers, thereby supporting the government’s efforts to maintain the flow of credit in this stressful environment."

Venture capital investing in the U.S. has dropped to its lowest level in more than 10 years, according to the latest Moneytree report by PriceWaterhouseCoopers and the National Venture Capital Association. Wisconsin and the Midwest were no exception. The state only saw one VC investment during the first quarter, a $2.89 million placement, the report states. Read more in this week's edition of Biz Times Money Weekly.

Mimma's Café, a popular Italian restaurant on Brady Street in Milwaukee, is doing well and is not going to close, according to restaurant owner Mimma Megna and her attorney, Luke Chiarelli, reports BizTimes Milwaukee managing editor Andrew Weiland, author of today's Milwaukee Biz Blog.

Real estate developer Terrence Wall has upped the ante in the contest to build a new downtown library. The real estate developer and president of T. Wall Properties is ready to donate $3 million toward the Madison Central Library -- provided the city moves forward with his vision for the project. Read more in BizTimes Milwaukee's daily roundup of headlines from newspapers across the state at www.biztimes.com/#news.

After the BizTimes Stock Index fell 4.95 points to 84.48 Monday, local stocks rebounded in early morning trading today. The stock of almost every publicly traded company in southeastern Wisconsin gained ground in trading this morning and the Dow Jones Industrial Average also gained about 70 points. The largest local gainers were Manpower Inc. (up $5.46 to $39.72) and Badger Meter Inc. (up $3.43 to $34.24). The largest local decliners were Twin Disc Inc. (down 38 cents to $7.35) and Strattec Security Corp. (down 16 cents to $10.52).