continues to impress.
The industrial conglomerate, which only two years ago appeared on the brink of disaster as new management took over, on Tuesday posted another strong quarterly profit and boosted financial guidance. The news will likely boost Tyco shares, which have more than tripled off their lows in the summer of 2002.
"We're quite pleased with our results for the quarter. They reflect continued progress in our efforts to build Tyco into a world-class operating company," said CEO Ed Breen. "We're continuing our focus on the fundamentals-satisfying our customers, generating cash to reduce debt, running our operations more efficiently, and increasing margins to produce earnings growth across the company."
For the second quarter ended March 31, the Pembroke, Bermuda, company posted net income of $782 million, or 37 cents a share. That's up from the year-ago $124 million, or 6 cents a share, and a nickel ahead of the Wall Street consensus estimate. Revenue rose 11% to $10 billion from $9 billion a year earlier.
So-called organic revenue growth, excluding the impact of acquisitions and currency translation, was 3.4%, Tyco said, driven by strong performance at Electronics, Healthcare, and Engineered Products & Services. The company said it trimmed debt by $1.2 billion in the quarter and that its Electronic Components business saw an 8% rise in backlog.
Tyco forecast third-quarter earnings of 39 cents to 42 cents a share and 2004 earnings of around $1.55. The figures exclude the impact from the restructuring and divestiture program announced in November 2003. Analysts expect earnings of 40 cents for the third quarter and $1.51 for the year.
The company is also raising its full-year cash flow guidance and now expects to achieve cash flow from operating activities of $5.7 billion and free cash flow of $4 billion before any voluntary pension contributions.
"Since the beginning of our fiscal year, we have seen an improvement in our end markets and we feel better about the global economy," CEO Breen said. "As a result of these improved business conditions and our operational progress, we are raising our outlook."