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Tyco Beats Targets Despite Big Loss

Tyco Electronics takes a huge loss on goodwill charges, but its results still beat Wall Street's estimates.
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Tyco Electronics


reported a huge loss in its fiscal second quarter, mostly from goodwill-impairment write-downs as demand continued to collapse for many of its core products.

The Bermuda-based maker of industrial electronics components also offered a cautious third-quarter outlook, reducing guidance while warning about continuing decline in sales.

Tyco said it lost $3.8 billion, or $7.08 a share, as the company took charges equivalent to $7.22 share. Goodwill impairments alone amounted to $3.5 billion, or $6.60 on an EPS basis.

Excluding items, Tyco said it earned 14 cents a share, well above Wall Street's EPS targets for the quarter of 4 cents, according to a Thomson Financial poll of analysts.

A year ago, Tyco posted earnings of $301 million, or 62 cents a share.

Revenue for the current quarter dropped 33% to $2.5 billion from $3.66 billion. The effects of a stronger dollar contributed about 5% to that decline, the company said.

For its fiscal third quarter, Tyco now expects EPS before items of 1 cent to 6 cents -- below analysts' previous target of 8 cents -- and revenue of as little as $2.35 billion, which would represent a 38% drop from the same period in 2008.

The outlook excludes results from Tyco's wireless-systems unit, which it agreed to sell earlier this month to defense contractor Harris for $675 million.

Shares of Tyco were trading in the early afternoon at $18.15, up 7.52%.

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