Tyco 1Q Earnings Drop 49% on Split Plans; Core Earnings Best Analysts’ Forecastsâ€Ž
BOCA RATON, Fla. — Tyco Int’l reported this week its fiscal first-quarter earnings slumped 49% over the year-earlier quarter due, in part, to costs tied to its plans to reshape itself into three separate companies and the acquisition of Visonic.
The company said its earnings per share climbed 12% to 84 cents in its fiscal first quarter, which bested analysts’ estimates by 5 cents, largely on strengths in its fire suppression business and valves unit.
Revenue at the company slipped 4% to $4.2 billion, slightly under analysts’ forecasts.
First-quarter revenue for Tyco’s ADT Security Services division — its largest — climbed 2% to $2.2 billion, though profits slipped 2%. Fire protection revenue climbed 3% to $1.1 billion, but profits there surged 64%. Flow control revenue climbed 12% to $923 million, with profits up 14%.
“We delivered a strong quarter operationally with continued organic revenue growth supported by improving order activity,” Tyco CEO Ed Breen said in a statement. “The year-over-year improvement in our operating margin reflects increased volume in our product businesses, a higher mix of service revenue and the benefits of our cost containment and restructuring actions.”
The company reported its previously announced plans to split the firm into three separate units is on track for completion by the end of the fiscal fourth quarter. The split will give its three distinct businesses — the ADT North America residential security business, commercial fire and security business; and flow control products and services — more flexibility to grow.
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