Tyco International Swings to 4th-Quarter Loss on Charges, Revenue Down 2.5%

   By Melodie Warner 
 

Tyco International Ltd. (TYC) swung to fiscal fourth-quarter loss on separation and other charges while revenue declined at a slower-than-expected pace.

The industrial conglomerate spun off its North American security business in September to create ADT Corp. (ADT). It also split off, then merged its pipe-and-valve business with pump-filter manufacturer Pentair Inc. (PNR). What remains of Tyco is focused on fire-suppression systems for commercial buildings and safety equipment.

Tyco had lowered its fiscal fourth-quarter fire and security segment revenue guidance in September to roughly $2.5 billion, citing certain uncollectible contracts. The company also said it planned to record a $40 million to $60 million charge to increase its reserve for the aged receivables and expected to increase its litigation reserve by $15 million to $17 million.

For the quarter ended Sept. 28, Tyco reported a loss of $419 million, or 91 cents a share, compared with a profit of $397 million, or 84 cents, a year earlier. Excluding items such as the previously disclosed reserves, debt-extinguishment and separation costs, adjusted per-share earnings from continuing operations fell to 33 cents from 43 cents. Revenue dropped 2.5% to $2.73 billion.

Analysts polled by Thomson Reuters had most recently forecast earnings of 35 cents a share on revenue of $2.72 billion.

Operating margin fell to 5.6% from 7.9%.

Shares closed Tuesday at $27.33 and were inactive premarket. The stock has risen 19% so far this year.

Write to Melodie Warner at [e-mail]

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