TRENTON, N.J. - Diversified manufacturer Tyco International Inc. said Tuesday its fiscal first-quarter earnings fell 54 percent from a year earlier, when it still owned its former healthcare and electronics businesses. The results handily topped Wall Street expectations.
The maker of security, fire protection and industrial products earned $363 million, or 73 cents per share, in the quarter that ended Dec. 28, compared with $793 million, or $1.57 per share, a year ago.
Tyco, which is nominally based in Bermuda but has its corporate headquarters in West Windsor, N.J., reported several one-time items that together would have boosted earnings per share to 74 cents. In the year-ago quarter, Tyco earned 49 cents per share from continuing operations, excluding items.
Two former Tyco segments, now called Tyco Electronics and Covidien Ltd., the health care business, were spun off and began operating independently last July.
Revenue, which the company pre-announced in January, totaled $4.87 billion. At that time, the amount beat analysts' consensus estimate of $4.75 billion and topped year-ago sales of $4.37 billion by nearly 12 percent. Half that increase came from favorable currency exchange rates.
Analysts surveyed by Thomson Financial expected adjusted profit of 57 cents per share on revenue of $4.86 billion.
"This was a strong first quarter for Tyco, and a good start to the year," Tyco Chief Executive Officer Ed Breen told analysts during a conference call, adding that he doesn't see any problems looming.
Tyco's best-known and largest division, the ADT security monitoring business, saw revenue jump 7 percent, to $2 billion, mainly on double-digit growth in Asia and Latin America. Company executives said there's no sign that the prolonged U.S. housing downturn is affecting the business. The rate of customers dropping the service or being shut off has actually dipped slightly. Operating income at ADT jumped 24 percent to $249 million, despite a $24 million expense to convert many North American customers from analog to digital service.
Revenue in the flow control segment, driven by strong sales of industrial valves and water and thermal controls, jumped 29 percent to $1.07 billion. Fire protection services posted a 5 percent jump in revenue, to $832 million, and the smaller safety products and electrical and metal products segments each saw revenue rise 10 percent.
Tyco reiterated its 2008 profit forecasts, raised just last month: a range of $2.60 to $2.70 per share, excluding separation and restructuring charges related to the spinoff of its healthcare and electronics units.
Wall Street is predicting full-year profit excluding items of $2.66 per share on sales of $20.10 billion.
"We are taking the appropriate steps to drive earnings growth," Breen told the analysts.
Breen said the company is taking additional steps to drive profit growth, including measures to increase productivity, reducing the company's tax rate, divesting more businesses and acquiring others that are a good fit.
Shares fell $1.15, or 2.8 percent, to $39.45 as the Dow Jones industrial average slid more than 200 points on an unfavorable economic report Tuesday.
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