Johnson Controls Rises After Boosting Buyback Program

Johnson Controls Inc. (JCI), the largest U.S. auto-parts maker, rose to its highest since at least 1980 after saying it will boost a stock-buyback program by $3 billion on greater confidence in its outlook for fiscal 2014 and beyond.

The shares gained 7.2 percent to $51.69 at 10:40 a.m. in New York after climbing to $51.90, the intraday peak in data compiled by Bloomberg that go back to July 1980. The stock had advanced 57 percent this year through yesterday, as the Standard & Poor’s 500 Index rose 25 percent.

Johnson Controls’ total share-repurchase authorization is now $3.65 billion, according to a statement yesterday. The Milwaukee-based company said it has bought back $400 million of shares so far this fiscal year and will purchase $800 million of its stock from Goldman Sachs Group Inc. The rest of the authorization is to be used during fiscal 2015 and 2016.

The auto-parts and building-controls company also raised its quarterly dividend by 16 percent to 22 cents a share. The payment will be made Jan. 6 to shareholders of record as of Dec. 16.

“We have a strong balance sheet and are committed to disciplined capital allocation, giving us the capacity to continue investing in our businesses while meaningfully increasing the cash we return to our shareholders,” Chief Executive Officer Alex Molinaroli said in the statement. 

To contact the reporter on this story: Mark Clothier in Southfield, Michigan at mclothier@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.