Before the stock market opened in New York on Friday, April 23, Johnson Controls (JCI) announced earnings of 43 cents a share (excluding one-time items.) That was four cents a share above Wall Street estimates for the company’s second quarter of fiscal 2010.

Including special items—since last year’s second quarter included so many of them–earnings per share climbed to a profit of 40 cents a share from a loss of 33 cents a share in the second quarter of fiscal 2009.

Revenue increased by 32% to $8.32 billion. Wall Street analysts had projected $7.92 billion.

And, best yet, the company raised guidance for the full 2010 fiscal year.

Revenues will come in at $33.5 billion for the full year, the company said. Wall Street was projecting $33.15 billion. Earnings per share will fall between $1.90 and $1.95. Wall Street had been projecting $1.85 a share.

Most of the better than expected results for this quarter and projected for the rest of fiscal 2010 comes from faster than anticipated recovery in the company’s auto interior business. Higher production in North America for the rest of fiscal 2010 should be more than enough to offset a decline in European auto sales that Johnson Controls projects at about 1 million units in calendar 2010. Sales at the company’s joint venture in China more than doubled in the quarter. According to Morningstar Johnson Controls holds 45% of the Chinese market for auto seating.

The company’s conventional lead battery business for cars saw a 9% increase in unit sales for replacement batteries. The company’s new joint venture with Saft Groupe (SGPEY) to produce lithium-ion batteries for hybrids and electric cars began production of its first batteries in the quarter. The company’s first lithium-ion batteries are for the BMW 7-Series hybrid. The company also won a contract to supply lithium-ion batteries to Ford (F) for its Transit Connect van.

The last of Johnson Controls’ three business segments, building efficiency, continues to struggle, however. Revenue fell by 8% (excluding currency effects) on continued weakness in non-residential demand for cooling and heating equipment and building energy management. Order backlog fell, but by just 8% for the quarter.

Looking at some back of the envelope calculations, Johnson Controls guidance for fiscal 2010 looks conservative. It’s based on production estimates for just 10.9 million units in North America in fiscal 2010. That’s lower than the 11.4 million units projected by such auto industry market watchers as CSM Worldwide.

As of April 26, I’m increasing my target price for Johnson Controls to $39 a share by July 2010 from my previous target of $36.27.

Full disclosure: I own shares of Johnson Controls in my personal portfolio.