Why Johnson Controls Went Flat in 2012

2012 is nearing its end, and now's a good opportunity to look at what happened throughout the year to the stocks you follow. If you know the important things that a company achieved, as well as any challenges it failed to overcome, then you can make a better decision about whether it really deserves a spot in your portfolio.

Today, I'll look at Johnson Controls (NYSE: JCI  ) . The Tier 1 auto supply company provides parts and services to a variety of global automakers, with further applications including building HVAC systems and vehicle power solutions. But this year, its stock hasn't gone anywhere in a slow economy. Below, you'll find more on what moved shares of Johnson Controls this year.

Stats on Johnson Controls

Year-to-Date Stock Return

(1.1%)

Market Cap

$20.6 billion

Revenue, past 12 months

$42 billion

Net Income, past 12 months

$1.23 billion

1-Year Revenue Growth

2.7%

1-Year Net Income Growth

(13.4%)

Dividend Yield

2.6%

CAPS Rating

****

Source: S&P Capital IQ.

What held Johnson Controls back in 2012?
As primarily an auto-parts maker, Johnson Controls' fortunes are largely tied to those of major automakers. With Ford (NYSE: F  ) , General Motors (NYSE: GM  ) , and Daimler listed as its largest customers, Johnson Controls needs those companies to do well in order for it to maximize its success. One reason for Johnson's lackluster performance this year may come from the fact that Ford and GM have had tough problems in Europe, where Johnson gets a significant amount of its sales.

But Johnson Controls is seeking to outpace its competitors by picking up strategically important assets, especially in the battery area. The company grabbed up all of bankrupt A123 Systems' automotive assets for $125 million. That not only represents the death-blow to one of Johnson's big battery competitors but also will help it keep rival Exide Technologies (NASDAQOTH: XIDEQ  ) at bay.

Battery technology is so important because Johnson Controls is hoping to be a first-mover on the move toward pure-electric cars. Although Tesla Motors (NASDAQ: TSLA  ) uses battery technology from Panasonic, greater adoption of electric cars would lead to more demand for batteries throughout the industry, eventually bolstering Johnson's bottom line.

2012 hasn't been kind to Johnson Controls, but the company has taken steps toward reaping bigger rewards in the years to come. If the auto industry can make greater progress in 2013 toward a full recovery from its financial crisis in 2008 and 2009, then Johnson Controls should follow the automakers higher. 

Learn more
Johnson Controls had an interesting 2012, but to reap the true benefits in 2013, the company will have to focus on execution. Find out everything you should know about the battery maker in our premium report, in which we examine a number of factors to conclude whether Johnson Controls is a buy for smart investors like you. Thousands have already claimed their own premium company reports, and you can gain instant access to yours by clicking here now.

Click here to add Johnson Controls to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.


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