Tyco Shares Slip on Lower Profit
Tyco International (TYC) shares fell as much as 5.5% Thursday, after the company beat expectations and boosted its full-year guidance, but posted a dip in profit due to discontinued operations.
The diversified manufacturer of security, safety and other industrial products posted a net profit of 56 cents a diluted share from continuing operations vs. 33 cents a diluted share from continuing operations in the year-ago period. Excluding special items, the company earned 67 cents a diluted share, easily beating the consensus estimate of 57 cents a share, according to Thomson Financial.
But the company's net profit slipped to $280 million from $835 million, after it split into three companies last year. Tyco Electronics (TTY), one of those companies, saw shares rise Thursday on an earnings beat. The other, Covidian (COV), reports results May 6.
Shares of Tyco International, which dipped as low as $44.23, were falling 3.9% to $44.98 in recent trading Thursday.Revenue increased 8.4% vs. the prior year to $4.9 billion, in line with analysts' expectations of $4.94 billion. Citing improved operating margins across its businesses and strong first-half results, the company now sees a profit of between $2.65 and $2.75 per share from continuing operations, before special items. Analysts expect earnings of $2.67 a share on revenue of $20.13 billion. "We continue to make progress on our portfolio refinement efforts, announcing an acquisition in our security business and the divestiture of businesses that no longer meet our strategic direction," CEO Ed Breen said in a company statement.
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