Tyco Posts Higher Net Income, Sees Separation In Second Quarter
Conglomerate Tyco International said quarterly net income rose 43%, helped by strong results at its fire and security unit.
But the company said its results from continuing operations fell about 5%, hurt by charges related to its plan to split into three publicly traded companies. Tyco expects that the split should occur early in this year's second calendar quarter.
In the fiscal first-quarter ended Dec. 29, net income rose to $793 million, or 39 cents a share, from $556 million, or 27 cents a share, a year ago.
Revenue rsoe 7.6% to $10.33 billion from $9.6 billion a year ago.
Earnings from continuing operations were $742 million, or 37 cents a share, down from $803 million, or 39 cents a share, in the same period a year ago.
But excluding a restructuring charges of 3 cents a share and separation costs of 5 cents a share, Tyco earned 45 cents a share. Analysts polled by Thomson Financial predicted a profit of 44 cents a share, on a similar basis.
Tyco announced its restructuring program in its fiscal fourth quarter and expects to incur about $500 million in charges in fiscal 2007. First-quarter charges totaled $83 million. Tyco is preparing to separate into three publicly traded companies. Tyco's healthcare unit will be spun off into a separate company called Covidien and its electronics division will be call Tyco Electronics. The company's fire and security operations and its engineered products and services segment will retain the name Tyco International.
"We feel good about our first-quarter operational performance and the global economic environment overall," Chief Executive Ed Breen said in a written statement.
Three of Tyco's four divisions posted higher sales and higher operating profits for the quarter, but its health care segment reported lower profit because of restructuring and other charges.
The electronics segment reported strong demand from the automotive and industrial sectors, offset by lower growth in computers and the communications market.
Breen said the company is seeing "some slowing" in certain electronics markets such as the computer and communication infrastructure equipment sectors, but expects that to improve in the second half of fiscal 2007.
Tyco expects second-quarter sales to rise 6% to 7%.
The company will host a conference call and webcast at 8:30 am New York time.