Diversified manufacturer Tyco International reported a higher-than-expected quarterly profit on Tuesday on strong demand from energy and industrial markets and an improving performance at its ADT security division.
The company, whose shares rose more than 3 percent in premarket trading, said it had benefited from a lower-than-expected tax rate during the quarter and that its program to control costs was running ahead of schedule.
Tyco also affirmed its full-year forecast, citing strength in global markets, which now account for more than half of its sales.
Quarterly earnings from continuing operations and before special items rose to $361 million, or 73 cents per share, in the first quarter ended on Dec. 28 from $249 million, or 49 cents per share, a year earlier.
The results were 17 cents ahead of the analysts' average profit forecast of 56 cents per share, according to Reuters Estimates.
The company's 2008 profit forecast of $2.60 to $2.70 per share from continuing operations "looks conservative in light of these results," Deutsche Bank analyst Nigel Coe said in a note to clients.
Tyco, which last month provided preliminary results, said sales rose 12 percent to $4.87 billion, compared with Wall Street estimates of $4.76 billion. Half of the sales growth was "organic," or from existing businesses.
The company's biggest unit, ADT, posted a 24 percent increase in operating income as sales rose 7 percent.
Chief Executive Ed Breen said ADT had added accounts despite a downturn in U.S. housing. However, he added that the company was "monitoring" sales to commercial customers like retailers, since some large buyers were postponing spending on upgrades of ADT systems.
"These are pushbacks, rather than cancellations," Breen said on a conference call.
At the flow control division, which makes valves, pipes and other products for energy and industrial uses, profit rose 58 percent, while sales increased 29 percent.
Tyco, which has overhauled its operations in the wake of an accounting scandal earlier this decade, last year spun off its electronics and health care divisions into separate publicly traded companies. Tyco Electronics will report results on Wednesday.
Besides ADT and flow control, Tyco's remaining businesses include a fire protection unit, one focused on safety products like surveillance systems, and an electrical and metal products group that makes steel tubing.
All three of those segments posted higher quarterly sales, but the electrical and metal products segment had lower margins and no profit growth.
At Monday's close, Tyco shares, which had fallen to a 52-week low on Jan. 23, had rallied about 20 percent since the company pre-announced quarterly results.
The stock rose 3.2 percent to $41.90 in trading before the market opened.