TYCO International Earnings: TOPS Expectations

S&P 500 (NYSE:SPY) component TYCO International Ltd. (NYSE:TYC) reported its results for the third quarter. Tyco International 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 Ltd. Earnings Cheat Sheet

Results: Net income for TYCO International Ltd. fell to $242 million (54 cents per share) vs. $359 million (76 cents per share) a year earlier. This is a decline of 32.6% from the year-earlier quarter.

Revenue: Rose 3.9% to $4.46 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: TYCO International Ltd. reported adjusted net income of $1.01 per share. By that measure, the company beat the mean estimate of 93 cents per share. It beat the average revenue estimate of $4.22 billion.

Quoting Management: Tyco Chairman and Chief Executive Officer Ed Breen said, “Our third quarter results reflect good top-line growth and strong operating performance across our businesses which helped us deliver a 19% increase in earnings per share. We continue to focus on growth, cost management and productivity initiatives aimed at expanding our operating margins and we are making the critical investments necessary to position our businesses for the future.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 7 cents in the second quarter, by 5 cents in the first quarter, and by 6 cents in the fourth quarter of the last fiscal year.

Margins were up in the second quarter, following a drop in the previous quarter. Gross margin grew 55.5 percentage points from the year-earlier quarter to 94%. In the first quarter, the figure rose 0.2 percentage point to 38.5% from the year earlier quarter.

Net income has increased 2.7% year-over-year on average across the last five quarters. The biggest gain came in the fourth quarter of the last fiscal year, when income climbed 50.4% from the year-earlier quarter.

The company’s revenue has now risen for two straight quarters. In the second quarter, revenue increased 9.1% to $4.35 billion from the year-earlier quarter.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the fourth quarter is $1.04 per share, down from $1.07 ninety days ago. The average estimate for the fiscal year is $3.68 per share, a rise from $3.65 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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