Johnson Controls Inc. Wheels and Deals, While Boeing Salvages Derailed 737 Fuselages

Here are two industrial giants making headlines in the markets today.

Jul 7, 2014 at 3:00PM

The Dow Jones Industrial Average (DJINDICES:^DJI) is taking a breather today after reaching 17,000 for the first time at the end of last week's holiday-shortened trading. By midafternoon, the Dow was trading 56 points lower, or 0.33%, as investors found few reasons to buy before earnings season kicks off later this week.

"This earnings season has a lot of pressure on it since we need to see significant revenue growth to offset weakness in the first quarter," Oliver Pursche, president of Gary Goldberg Financial Services, told Reuters.

As companies gear up to issue second-quarter earnings numbers, here are some industrial giants making headlines in the markets today.

Boeing (NYSE:BA) investors likely raised an eyebrow when a 19-car train derailment in Montana last week sent 737 fuselages down an embankment and toward a river. The 90-car train was carrying a handful of 737 fuselages, as well as pieces of the manufacturer's 777 and 747 aircraft from Spirit AeroSystems (NYSE:SPR).

Fortunately, this incident will have very little impact on second-quarter earnings, if any at all.

"High on the annoyance scale, but not a major setback," Howard Rubel, a managing director at Jefferies, told Reuters.

If all six 737 fuselages are scrapped, which hasn't yet been determined, that would still only represent a few days' worth of production. Considering that Boeing makes 42 737's per month, it would likely be able to make up the lost product within a month.

Meanwhile, industrial multinational Johnson Controls (NYSE:JCI) has been wheeling and dealing recently. Just last week the company closed on the sale of its automotive electronics business to Visteon. Under the terms of the $265 million deal, Visteon will acquire Johnson Controls' instrument cluster, infotainment, display, and body electronics products, according to a Johnson Controls press release.

This was just the latest move in Johnson Controls' attempt to sell off its automotive electronics business. Roughly a year ago, the company sold its HomeLink Electronics unit to Gentex for $700 million.

This doesn't come as a surprise for any Johnson Controls investors, as the company has communicated its intention to move away from the auto electronics business to focus on core segments and diversify its portfolio from the highly cyclical automotive industry. As recently as 2005 Johnson Controls' automotive business segment accounted for 69% of company sales. By 2013 the automotive segment only accounted for 51% of sales, and that figure will continue to decline with looming growth in the company's building efficiency and power solutions group.

While Johnson Controls is walking away from its automotive electronics business, it still sees potential in other automotive segments. The company announced two months ago that it would form a joint venture with a Chinese company owned by Shanghai Automotive Industry to create a massive automotive interiors company with revenue reaching roughly $7.5 billion.

Warren Buffett's worst auto-nightmare (Hint: It's not Tesla)
A major technological shift is happening in the automotive industry. Most people are skeptical about its impact. Warren Buffett isn't one of them. He recently called it a "real threat" to one of his favorite businesses. An executive at Ford called the technology "fantastic." The beauty for investors is that there is an easy way to invest in this megatrend. Click here to access our exclusive report on this stock.

Daniel Miller has no position in any stocks mentioned. The Motley Fool recommends Spirit AeroSystems Holdings. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers