Shares of Tyco (TYC - Get Report) were among the NYSE's losers Friday, falling 9% after the conglomerate cut its first-quarter earnings guidance and laid out plans for a breakup into three separately traded companies.
Tyco now sees first-quarter earnings from continuing operations of about 38 cents a share, down from an earlier view of 40 cents to 42 cents a share. Analysts polled by Thomson First Call had been projecting earnings of 42 cents a share. For all of 2006, the company now sees earnings of $1.85 to $1.92 a share, below Wall Street's projection of $2.01 a share.
As for the company's business reorganization, Tyco plans to separate its health care and electronics businesses from the rest of the company. "After a thorough review of strategic options with our board of directors, we have determined that separating into three independent companies is the best approach to enable these businesses to achieve their full potential," the company said. The breakup plan is expected to cost about $1 billion. Shares recently were trading down $2.71 to $27.60.
Insteel Industries (IIIN - Get Report) rose 7% after the maker of steel wire reinforcing products announced a $15 million share repurchase plan. Based on Jan. 12 closing prices, the buyback program represents about 9% of the company's outstanding stock. "Our strategy for the use of operating cash flow includes paying dividends, making capital investments and strategic acquisitions, and opportunistic repurchases of the company's stock, all with the intent of enhancing shareholder value," the company said. Insteel also increased its existing revolving credit facility to $100 million from $75 million and extended the maturity date by two years to June 2010. Shares were trading up $1.22 to $19.35.Shares of Linn Energy (LINE - Get Report) rose 9% in their first day of trading. The independent natural gas company, in the first initial public offering of 2006, priced 11.75 million units at $21 apiece, resulting in net proceeds of about $223 million. The pricing came in at the high end of the proposed range of $19 to $21 a unit. About $122 million of the proceeds will be used to pay debt. Shares were trading up $1.27 to $22.97.