Tyco Int'l. Q2 Profit Surges On Lower Charges, Higher Organic Sales

(RTTNews) - Swiss security products maker Tyco International Ltd. (TYC) reported Friday that its second-quarter profit nearly tripled from last year, benefited by significantly lower special charges and higher organic sales. Looking ahead, the company said it is well positioned to deliver on 15 percent earnings per share CAGR target through 2015.

Chief Executive Officer George Oliver said, "We had another strong performance in the second quarter, demonstrating our ongoing effectiveness at executing on our growth strategy and operational improvement initiatives. We are starting to see an uplift in the top line, as continued growth in service and products revenue is now being supplemented with growth in installation revenue."

For the second quarter, net income attributable to shareholders surged to $207 million for $0.44 per share from last year's $72 million or $0.16 per share.

The results included income from discontinued operations related to its around $1.93 billion worth divestiture of South Korean security business, ADT Korea. The company also completed the sale of its minority interest in Atkore International.

On a continuing operations basis, income was $183 million or $0.39 per share, higher than prior year's $51 million or $0.11 per share. The latest quarter results included special charges of $0.06 per share, compared to prior year's charges of $0.26 per share. Before special items, earnings from continuing operations was $212 million or $0.45 per share, compared to $175 million or $0.37 per share last year. On average, 14 analysts polled by Thomson Reuters expected earnings per share of $0.41 for the quarter. Analysts' estimates typically exclude one-time items.

Before special items, segment operating income increased 15 percent year-over-year to $335 million, and operating margin improved 170 basis points to 13.5 percent.

Quarterly net revenue of $2.49 billion was 0.5 percent higher than the prior-year quarter's $2.47 billion, while 12 analysts estimated revenues of $2.50 billion for the period. The company noted that acquisitions contributed two percentage points of growth, more than offset by the impact of divestitures and changes in foreign currency exchange rates.

On an organic basis, revenue went up by 2 percent in the quarter, with 1.5 percent growth in service, 1 percent growth in installation and 2 percent growth in products.

North America Installation & Services segment was hurt by the divestiture of the guarding business and unfavorable changes in foreign currency exchange rates. Organic revenue increased 1 percent. Backlog of $2.4 billion was consistent with the prior year.

Rest of World Installation & Services segment's revenue was flat, but increased 2 percent organically. Backlog of $2.3 billion increased 11 percent year over year.

As announced earlier, the board approved an additional $1.75 billion authorization for share buybacks. Combined with the remaining $250 million from the prior authorization, the total share repurchase authorization is currently $2.0 billion.

On the NYSE, Tyco shares lost $0.19 or 0.45 percent on Thursday, and settled at $42.21.