Tyco Earnings Cheat Sheet: Expecting Business Trends to Fuel Growth

Falling revenue did not prevent S&P 500 (NYSE:SPY) component TYCO International Ltd. (NYSE:TYC) from reporting a profit boost in the second quarter. Tyco International Ltd. provides security products and services, fire protection and detection products and services, valves and controls and other industrial products.

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TYCO International Earnings Cheat Sheet for the Second Quarter

Results: Net income for the diversified machinery company rose to $315 million (67 cents/share) vs. $310 million (65 cents/share) in the same quarter a year earlier. A rise of 1.6% from the year earlier quarter.

Revenue: Fell to $3.99 billion YoY.

Actual vs. Wall St. Expectations: TYC reported adjusted net income of 73 cents/share. By this measure, the company beat the mean analyst estimate of 68 cents/share. Estimates ranged from 66 cents per share to 72 cents per share.

Quoting Management: Tyco Chairman and Chief Executive Officer Ed Breen said, “The 26% increase in earnings per share we delivered in the second quarter was driven by a stronger operating margin and continued improvement in our end markets. We are encouraged by the order trends in our late-cycle businesses and we expect these trends will help fuel our growth as we finish this fiscal year and enter 2012. During the quarter, we also took steps to strengthen our competitive position in Tyco’s core platforms by announcing the acquisitions of a leading security provider serving the Australia and New Zealand markets and a majority interest in a fully-integrated valve manufacturing business in the Middle East.”

Key Stats: A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the first quarter, which saw revenue rise 3.1%.

Competitors to Watch: Honeywell Intl. Inc. (NYSE:HON), 3M Company (NYSE:MMM), General Electric Company (NYSE:GE), China Security & Surveillance Tech. Inc. (NYSE:CSR), Checkpoint Systems, Inc. (NYSE:CKP), Magal Security Systems Ltd. (NASDAQ:MAGS), Mace Security Intl., Inc. (MACE), Textron Inc. (NYSE:TXT), and Napco Security Systems (NASDAQ:NSSC).

Today’s Performance: Shares of TYC are trading at $48.87 as of April 28, 2011 at 8:23 AM ET, unchanged from the previous close.


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