This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

ADT Reports Second Quarter 2014 Results

Stocks in this article: ADT

The ADT Corporation (NYSE: ADT) today reported its financial results for the second quarter of 2014. The Company reported diluted earnings per share of $0.34 for the second quarter of 2014, which includes a non-cash tax charge of $13 million related to Tyco's pending settlement with the IRS of a pre-separation tax liability. Excluding this and other special items, diluted earnings per share was $0.49 (1). This compares to diluted earnings per share excluding special items of $0.41 (1) in the second quarter of 2013. Using the Company's cash tax rate, diluted earnings per share before special items was $0.69 (1).

The Company reported total revenue of $837 million, an increase of 1.9% compared to the second quarter of 2013. Recurring revenue, which made up 92% of total revenue in the quarter, was $773 million, up 2.2% compared to the same period last year and up 2.8% in constant currency (1). Recurring revenue growth was primarily driven by an increase in average revenue per customer, which rose 3.2% over last year to $41.05. Revenue attrition was flat at 14.2% for the quarter sequentially and unit attrition for residential and small business was 13.7%, up 10 basis points sequentially primarily due to higher attrition in small business. ADT closed the quarter with 6.4 million customer accounts.

EBITDA before special items increased by $22 million to $431 million (1), 5.4% higher than the prior year and EBITDA margin before special items was 51.5% (1), a 170 basis point improvement. The year-over-year increase in margins was primarily attributable to productivity improvements and cost reductions.

Free cash flow before special items increased 33% to $121 million (1) in the quarter, up from $91 million (1) in the same period last year. The Company also reported steady-state free cash flow before special items, calculated on a pre-tax and unlevered basis, of $786 million (1). Steady-state free cash flow was flat sequentially as subscriber acquisition costs remained relatively high on increases in Pulse installations, elevated attrition levels, and flat sequential subscriber growth in the quarter.

"We drove improvements in our financial results, stabilized revenue attrition sequentially and made significant progress on our initiatives during the quarter," said Naren Gursahaney, ADT's chief executive officer. "We grew EBITDA, generated substantially more free cash flow, and delivered better bottom-line results. Also, aligned with our strategy to capture opportunities for growth, we invested in our future through an agreement to acquire Reliance Protectron Security Services, a high quality security services firm in Canada. Our Pulse home automation product continued to gain strong traction with take rates climbing to 44% combined and Pulse customer upgrades rising by 38% year-over-year. We also strengthened our senior team, adding new talent in the roles of chief marketing officer and vice president of dealers."

1 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,461.13 +73.92 0.43%
S&P 500 2,038.65 +9.10 0.45%
NASDAQ 4,726.1890 +44.6920 0.95%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs