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Tyco Secures Solid Profit Beat

Sarina Penn

Security-systems company Tyco (TYC Quote) reported a soaring fiscal first-quarter profit Tuesday.

Excluding discontinued operations, the Bermuda-based company made $369 million, or 74 cents a share, more than doubling from year-ago earnings of $163 million, or 49 cents a share, excluding items. Revenue spiked 11.6% year over year to a slightly-better-than-expected $4.87 billion.

That bottom line, meanwhile, crushed the average analyst estimate, which had called for 57 cents a share, according to Thomson Financial.

Delivering the most impressive climb was the company's Flow Control segment, which makes valve and actuator products for use in a variety of industries. The segment's operating income rocketed 53.1% from a year earlier to $171 million, less special items.

Flow Control also enjoyed organic sales growth of 17.7%, and overall revenue that leapt 28.6% to $1.07 billion, as it continued reaping substantial gains from "key end markets -- particularly energy and water."

Home-security unit ADT still brought in a bigger ratio of Tyco's overall revenue -- some $2 billion -- though that represents a more modest year-on-year rise of 7.3%. Those sales prodded operating income 10.3% higher to $256 million, before special items.

CEO Ed Breen said, that given this better-than-expected performance, among other things, 2008 should be a "solid year" for the company.

Fittingly, Tyco reaffirmed the in-line 2008 guidance revision it issued a couple of weeks ago: earnings from continuing operations should range between $2.60 to $2.70 a share, tightened from the prior per-share estimate of $2.50 to $2.75. Analysts are currently seeking $2.66.

Net income for the first quarter, including the effects of discontinued operations, was off 54.2% from a year ago to $363 million, or 73 cents a share.

Tyco shares were lately falling 74 cents, or 1.8%, to $39.86.