Swiss security products maker Tyco International Ltd. (TYC: Quote) reported Tuesday a 49.4 percent decline in first-quarter profit due to sharply lower income from discontinued operations. Adjusted income climbed from last year on higher revenues, benefited mainly from acquisitions. In addition, the company said its Board of Directors approved an additional $600 million in repurchase authority to the existing $150 million.
Chief Executive Officer George Oliver said, “We’re off to a great start as the new Tyco, integrating our fire and security businesses and executing on our growth strategy. I am especially pleased with the traction we are getting from our productivity and sourcing initiatives, and the positive impact we are seeing from our increased investments in research and development. Overall, our performance in the first quarter is a solid beginning to fiscal 2013.”
In October last year, Tyco had completed its separation transaction by bifurcating the company into ADT Corp. (ADT) and Flow Control business, and the merger of flow control business with water systems firm Pentair Inc. (PNR).
For its first quarter, Tyco’s net income attributable to shareholders plunged to $163 million or 0.34 per share from $322 million or $0.69 per share last year. Excluding prior year’s income from discontinued operations, first-quarter income from continuing operations climbed 62 percent from last year to $159 million or $0.34 per share.
Adjusted income from continuing operations, which excluded certain items, grew 55 percent to $191 million or $0.40 per share.
On average, 15 analysts polled by Thomson Reuters expected earnings of $0.39 per share for the quarter. Analysts’ estimates typically exclude one-time items.
Quarterly net revenue increased 5 percent to $2.60 billion from the prior year’s $2.48 billion, including a 3 percent benefit from acquisitions. Analysts were looking for revenues of $2.57 billion.
Organic revenue rose 1 percent with growth of 6 percent in products, and 2 percent in service, while installation revenue dropped 3 percent.
Segment-wise, North America Systems Installation & Services’ revenue of $976 million edged up 1.5 percent in the quarter with growth in service revenue, despite flat installation revenue. The company noted that the segment’s backlog of $2.4 billion declined 3 percent on a sequential basis, excluding the impact of foreign currency, in line with expectations.
Revenues from Rest of World Systems Installation & Services increased 3 percent to $1.1 billion, primarily driven by acquisitions. Backlog increased 3 percent on a sequential basis.
Global Products’ revenue climbed 16 percent, including a 9 percent benefit due to acquisitions. Organic revenue grew 6 percent with growth across all three product platforms.
As announced in December, Tyco’s Board of Directors proposes for shareholder approval a 7 percent annual dividend increase to $0.64 per share at the annual general meeting of shareholders, to be held on March 6.
On the NYSE, Tyco shares closed Monday’s trading at $30.70, down $0.53 or 1.70 percent.
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by RTT Staff Writer
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