Tyco Warns on Second Quarter Results


Tyco Int’l Ltd. said today its quarterly earnings will miss most analysts’ forecasts due to a big drop in sales of electronic connectors, particularly for printed circuit boards, the communications industry and computer makers, sending its shares to a three-month low. The warning for the March quarter took the shine off an earnings report that showed net income for the first quarter ended Dec. 31, 2001, more than quadrupling over the year-earlier period, which had been hurt by an accounting change.

Tyco Chairman and CEO Dennis Kozlowski told analysts on a conference call that he expects electronics revenue to fall as much as 25 percent in the March quarter. “Throughout the quarter we received what we thought were some pretty good orders by significant customers of ours, only to have those orders be turned around and canceled on us a week later,” he said. “It continues to show customers not willing to commit to overall inventory levels.”

Asked if Tyco will take further restructuring moves to bring expenses in line with revenue, Kozlowski said he did not want to do that in case the market snaps back. But he did not rule out such moves.

In late morning today, Tyco shares were down $4.42, or 8.4 percent, at $47.98 after dropping $47.30, their lowest level since Oct. 11. The stock, which has been smarting from unsubstantiated rumors of a possible merger with Honeywell Int’l Inc., has fallen from nearly $60 in late December 2001. It expects to earn 80 cents to 82 cents a share in the March quarter.

The company said surging demand for security systems inside skyscrapers, homes and airports will keep its full-year profit expectations on track.

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