Tyco International profit beats estimates

By @ibtimes on

Tyco International Ltd , which is at the center of takeover speculation, beat Wall Street earnings forecasts on Thursday amid sharply higher operating profits at its core security division.

The maker of security systems for homes and businesses earned $315 million, or 67 cents per share, in the second quarter ended March 25, up from $310 million, or 65 cents per share, a year earlier.

Earnings from continuing operations, excluding special items, were 73 cents per share, 5 cents ahead of the analysts' average estimate, according to Thomson Reuters I/B/E/S.

Sales slipped 2 percent to $3.99 billion, matching forecasts.

Year-earlier revenue included a business in which Tyco sold a majority stake. Excluding those results, sales were up 6 percent.

Sales rose 12 percent at the security solutions business, but profit jumped 25 percent. Tyco cited demand from commercial customers and growth in recurring service revenue, which commands a higher margin.

Tyco has been the center of takeover speculation this month.

People familiar with the matter said France's Schneider Electric SA had held early discussions about buying the company, which lifted Tyco shares to nearly three-year highs. Schneider's CEO later ruled out a deal that size, and Tyco shares retreated.

They closed Wednesday at $49.17, valuing the company at about $23 billion.

Tyco, which also makes fire and safety equipment and flow control products used in the energy industry, did not immediately update its full-year profit forecast.

The fire business showed higher sales and earnings, but income and revenue were both lower in the flow control unit.

(Reporting by Nick Zieminski; Editing by Lisa Von Ahn)

Join the Discussion