Johnson Controls Inc. (JCI) said Tuesday it expects a sales and earnings recovery in its automotive and building services units during its 2010 fiscal year amid higher new vehicle output and infrastructure improvements sparked by federally funded projects.

The company's forecast, released before the start of an analyst meeting in New York Tuesday, shows how quick cost-cutting efforts will pay off as the economic recession in the U.S. continues to ease.

"We took decisive actions in 2009 to dramatically improve our cost structure," said Johnson Controls Chief Executive Stephen A. Roell. "Johnson Controls is positioned to grow faster than our underlying markets with improved profitability. We expect to deliver profitable growth in 2010, with accelerating benefits in 2011 and beyond as our markets recover."

The company said diluted earnings for its fiscal year should finish higher than 2009 between $1.35 and $1.45 a share and revenue of $31 billion. Analysts had expected $1.44 a share and $30.15 billion in revenue. The fiscal year starts Oct. 1.

Fourth-quarter earnings will be between 40 cents and 42 cents a share with all automotive regions positing a profit. The mean estimate of analysts surveyed by Thomson Reuters was 39 cents.

Johnson Controls, which makes automotive parts and batteries along with providing heating and cooling services to commercial buildings, returned to profitability in its third quarter after two-straight periods of losses, and said that earnings should continue to get stronger.

The company expects 13% sales growth in its automotive parts business during the fiscal year while its automotive battery unit will report a 17% increase.

Johnson Controls expects a commercial building industry recovery in the U.S. beginning in the second half of 2010. U.S. residential heating and cooling markets also are forecasted to improve in 2010, after more than two years of significant declines. As a result, the building division will have a 3% growth in revenue for the fiscal year.

Nearly half of Johnson Controls revenue comes from producing commercial building equipment and services, but it also derives well over a third from making automobile seats, interior systems and batteries.

Johnson Controls will release its fourth-quarter results Oct. 27. Shares closed Monday at $27.13 and were inactive premarket. The stock is up 49% this year.

-By Jeff Bennett; Dow Jones Newswires; 248-204-5542; jeff.bennett@dowjones.com

(Nathan Becker contributed to this story) 248-633-3927)