Tyco International Ltd. said profit fell 19% in its latest
quarter and again cut its outlook for the year, as the stronger
dollar continues to pressure the company's top line.
The Cork, Ireland-based fire-protection and security systems
company, which moved its headquarters late last year to "business
friendly" Ireland from Switzerland, does more than half its
business outside of the U.S. The stronger U.S. dollar makes its
products more expensive abroad, and, like other companies that
generate a significant amount of revenue overseas, its top line has
been under pressure.
In January, the company said it expected foreign exchange to
shave 16 cents a share of off full-year profit, more than double
its earlier estimate. On Friday, Tyco further cut its earnings
projection for the year--this time citing the decline in the oil
and gas markets in addition to adverse foreign exchange effects.
The company now sees $2.23 to $2.27 in per-share profit, down from
its previous range of $2.30 to $2.40. Analysts had expected $2.33
in full-year earnings.
At the beginning of the year, Chief Executive George Oliver said
the company was partially offsetting the adverse foreign exchange
impact with benefits from recent acquisitions and additional
productivity. On Friday, Mr. Oliver said the company is investing
to expand its capabilities and technology while trying to
streamline operations in the face of challenging conditions.
Tyco also gave a downbeat forecast for the current quarter. The
company expects to earn 55 cents to 57 cents a share, before
special items like restructuring charges and a loss on a divesture.
Analysts polled by FactSet have projected fiscal third-quarter
earnings of 65 cents a share and revenue of $2.64 billion.
In all, Tyco reported profit of $167 million, or 43 cents a
share, down from $207 million, or 41 cents a share, a year earlier.
Excluding items, per-share profit 55 cents, up from 47 in the
previous year's quarter.
Revenue fell 2% to $2.43 billion. Excluding the negative
currency impact, Tyco said revenue rose 4% from a year ago.
Analysts polled by FactSet were looking for 49 cents in
per-share profit and $2.439 billion in revenue. Organic revenue
rose 2%, led by a 7% increase in the global products segment.
Revenue in the company's North America installation segment,
which represents 39% of the top line, rose about 1% to $944
million. A weaker Canadian dollar offset organic growth, Tyco said.
Installation services outside of the U.S. dropped 9.5% to $847
million. The company said organic growth was flat and that the
segment was hit by an 11% currency impact. Revenue from its global
products business rose 5.6% to $639 million.
On Friday, Tyco said its board approved plans to raise its
quarterly dividend 14% to 21 cents a share.
Shares, down 2% this year through Thursday's close, were
inactive in pre-market trading.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
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