Update: Tyco Amends Earnings - TheStreet

Update: Tyco Amends Earnings

The moves stemmed from an SEC probe.
Publish date:

Updated from 8:02 a.m. EDT

Following a review by

Securities and Exchange Commission

accountants, Bermuda-based

Tyco International


announced Monday that it has amended its earnings for fiscal 1999 and the first quarter of fiscal 2000.

Shares finished up 13%, as investors viewed the news as the de facto end of an ongoing inquiry into in the company's accounting practices. Shares closed up 5 5/8 at 48 7/8.

The company said it will raise its earnings per share by 2 cents for fiscal 1999 and decrease earnings per share for the first quarter of fiscal 2000 by the same amount.

Tyco said the changes are due to one-time charges stemming from mergers and restructuring. It said the changes will have no impact on sales, cash flow or earnings before one-off charges.

Monday's news is the culmination of a saga that began in October when an investor newsletter

questioned Tyco's accounting practices as it took on merger after merger. Later, in December, at Tyco's request the SEC

launched a "nonpublic, informal inquiry" into the company's books. Over the last six years Tyco, an industrial conglomerate that produces electrical and electronic components, undersea cables for telecommunications systems, disposable medical supplies, and fire detection systems, has acquired more than 120 companies valued at $30 billion.

While the inquiry is technically still ongoing, no further revelations are expected, according to one analyst.

"People are viewing this as a vindication of Tyco on the accounting side," said Harriet Baldwin of

Deutsche Banc Alex. Brown

. Baldwin has a strong buy rating for Tyco, and her firm has done underwriting work for the company.