Restructuring Shrinks Tyco 4Q Profits

Thursday, Nov. 15, 2007 | 2:25 a.m.

NEWARK, N.J. - Tyco International Inc., which recently spun off its heath care and electronics units, said Thursday its fiscal fourth-quarter earnings fell 85 percent, hurt by restructuring and separation costs and a higher tax rate.

Net income dropped to $181 million, or 36 cents per share, from $1.25 billion, or $2.45 per share, a year ago. Earnings from continuing operations excluding restructuring costs and other one-time items totaled $285 million, or 57 cents per share, up 20 percent from $238 million, or 47 cents per share, in the prior-year period.

Revenue rose 9 percent to $5.03 billion from $4.62 billion a year ago.

The results topped estimates of analysts surveyed by Thomson Financial, who predicted profit of 55 cents per share on revenue of $4.97 billion.

Tyco International is composed of the fire, security and engineered products units of the former conglomerate of the same name. In late June, the health care and electronics units of that company began trading separately as Covidien and Tyco Electronics, respectively.

"Our results for the fourth quarter and the full year reflect good revenue growth, improved operating performance and strong cash flow," said Chairman and Chief Executive Ed Breen. "We had a good finish to the year and made progress on a number of key initiatives that we expect to drive solid earnings growth in 2008."

Tyco expects 2008 earnings will range from $2.50 to $2.65 a share, excluding special items, Breen told analysts during a teleconference. Analysts surveyed by Thomson Financial had projected $2.62.

"We are well-positioned in each of our product lines," Breen said. The company would continue to consider acquisitions that strengthen its product lines, he said, noting it announced Tuesday that it bought Trident Tek Inc., which makes video surveillance products. Tyco said Trident's products will bolster its American Dynamics brand of video security products.

For the fiscal year that ended in September, Tyco sustained a loss of $1.74 billion, or $3.52 a share, compared with a profit of $3.6 billion, or $6.95 a share, for the prior year. Yearly earnings from continuing operations excluding restructuring costs and other one-time items totaled $964 million, or $1.93 per share, up 17 percent from $824 million, or $1.60 cents per share, for the prior year.

Annual revenue rose 8 percent to $18.78 billion from $17.34 billion.

The 12-month results fell short of estimates by analysts surveyed by Thomson Financial, who predicted annual profit of $1.94 cents per share on revenue of $19.2 billion.

The company has nominal headquarters in Bermuda, but its executive offices are in West Windsor, N.J.

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On the Net: http://www.tyco.com