ADT Helps Lift Tyco Quarterly Profit
Tyco Int’l reported a 10-percent increase in quarterly net income with improved margins in three of its five units, including its big ADT Security Services division, which is set to expand after the $2 billion purchase of rival Broadview Security.
Tyco kept its 2010 forecast unchanged, noting continued weakness in its flow control segment, which makes valves, pipes and thermal controls for oil and gas, mining, chemicals and construction markets. Flow control orders were down from the prior quarter, but Tyco reports it will recover from cyclical lows in the second half of the year.
First-quarter net earnings rose to $303 million, or 63 cents per share, in the period that ended Dec. 25, from $277 million, or 58 cents per share, a year earlier.
Earnings from continuing operations were 65 cents share. Revenue dropped 4 percent to $4.25 billion.
The results were at the high end of the company’s recently raised earnings forecast, while sales matched the company’s Jan. 18 estimate.
The maker of security and fire-control systems, as well as valves and electrical products, said its efforts to cut costs were paying off. It also cited growth in sales of services and so-called recurring revenue from customers.
Weakness among commercial customers kept ADT revenue gains to just 1 percent, but ADT’s operating income jumped 14 percent amid growth in higher-margin services and cost cutting.
Sales and profits were down in Tyco’s segment that makes valves and thermal controls, and in two other areas, electrical and metal products, and safety products. Profits in its fire protection division rose despite lower revenue.
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