TYCO International Ltd. Earnings Cheat Sheet: Margins Expand Again, Profit Rises

Wall St. Cheat Sheet

S&P 500 component TYCO International Ltd. reported net income above Wall Street’s expectations for the fourth 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 Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the diversified machinery company rose to $392 million (83 cents per share) vs. $273 million (55 cents per share) in the same quarter a year earlier. This marks a rise of 44% from the year earlier quarter.

Revenue: Rose 4.4% to $4.69 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: TYC reported adjusted net income of 92 cents per share. By that measure, the company beat the mean estimate of 86 cents per share. It beat the average revenue estimate of $4.51 billion.

Quoting Management: “We are on track with our recently-announced plan to separate Tyco into three standalone public companies in this fiscal year. This marks an exciting new opportunity for all three companies to pursue their own focused growth strategies and create significant shareholder value,” Breen added.

Key Stats:

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 0.8 percentage point to 37.9% from the year earlier quarter. Over that span, margins have grown on average 1.2 percentage points per quarter on a year-over-year basis.

The company has now seen net income rise in three straight quarters. In the third quarter, net income rose 41.3% and in the second quarter, the figure rose 1.6%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 13 cents in the third quarter, by 5 cents in the second quarter, and by 7 cents in the first quarter.

The company’s revenue has now risen for two straight quarters. In the third quarter, revenue increased 0.4% to $4.29 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 first quarter of the next fiscal year is 82 cents per share, down from 85 cents ninety days ago. For the fiscal year, the average estimate has moved up from $3.17 a share to $3.18 over the last ninety days.

Competitors to Watch: Honeywell Intl. Inc. , 3M Company , General Electric Company , China Security & Surveillance Tech. Inc. , Checkpoint Systems, Inc. , Magal Security Systems Ltd. , Mace Security Intl., Inc. , Textron Inc. , and Napco Security Systems .

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

 

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