met second-quarter estimates but guided lower for the year, citing rising commodity costs and weakness in its European automotive electronics business.
The company also set a $50 million reserve for settling the
Securities and Exchange Commission's
ongoing probe of the company's business and accounting practices dating back to previous management. Tyco said it is in active talks with the SEC's enforcement division about settling that inquiry, which reportedly stemmed at least in part from concern on how the company was accounting for its many acquisitions under previous CEO Dennis Kozlowski.
Tyco made $221 million, or 11 cents a share, in the latest quarter on a continuing operations basis. That's down from the year-ago $783 million, or 37 cents a share. But the latest quarter includes 37 cents a share in charges, due to a big debt-retirement expense along with an asset impairment writedown in the plastics and adhesives unit and the SEC talks reserve. Excluding those costs, the second quarter beat the Wall Street estimate by a penny.
Revenue rose to $10.45 billion from $9.82 billion a year earlier, led by a 10% gain in electronics and a 15% rise in engineered products and services. Cash flow from operating activities was $1.7 billion, while free cash flow before dividends of $1.3 billion.
For the third quarter, Tyco expects to make 48 cents a share, which is 4 cents short of the Thomson First Call estimate. The company expects to make around $1.91 for the year, which is a nickel short. Tyco also said it would explore the divestiture of its plastics unit.
Tyco closed Monday at $30.72.