Stung by media reports of another accounting setback,
slipped 3% Wednesday morning even after the company accelerated the release of a surprisingly strong second-quarter cash-flow number.
The struggling conglomerate said its second-quarter loss from continuing operations amounted to 23 cents a share, after a 55-cent accounting charge. That puts operating earnings in line with Wall Street's expectations, not including the charge, which Tyco said was "related to primarily non-cash adjustments arising out of the Company's intensified internal audits and detailed controls and operating reviews, a change to an accelerated amortization method for its ADT-dealer program account assets, and a change in the accounting for the connect fee associated with ADT's dealer program."
Revenue was also in line with estimates, coming in at $9 billion. But the company shocked Wall Street by saying free cash flow for the period was $1.1 billion, which is way ahead of the $450 million-$750 million range Tyco laid out earlier this year.
The news comes as Wall Street braces itself for the latest
accounting setback at the company, which has been in turnaround mode for more than a year following the departure of its previous management. An article in Wednesday's editions of
The Wall Street Journal
indicated Tyco would uncover some $1.2 billion in new accounting problems when it released second-quarter earnings. That report was due for release Thursday morning, but the company halted its stock and offered the financial guidance Wednesday morning after shares plunged 7% on the
Tyco shares reopened after 11 a.m. EDT, slipping 42 cents to $14.95. The company said it will host a 5 p.m. EDT conference call to discuss the results.