The ADT Corporation
) reported fourth quarter fiscal 2013 GAAP net income of $96
million or 45 cents per share versus $94 million or 40 cents per
share earned in the year-ago quarter.
Excluding non-recurring items, net income stood at $99 million or
46 cents per share, versus $101 million or 43 cents per share in
the year-ago quarter. The quarterly adjusted earnings were
in line with the Zacks Consensus Estimate.
In fiscal 2013, ADT reported net income of $421 million or $1.88
per share versus $394 million or $1.67 per share in the year-ago
Excluding non-recurring items, net income stood at $413 million
or $1.84 per share in fiscal 2013 versus $411 million or $1.74
per share in the year-ago quarter. Fiscal adjusted earnings beat
the Zacks Consensus Estimate of $1.83.
Revenues for the quarter increased 4.2% year over year to $846
million, ahead of the Zacks Consensus Estimate of $844 million.
The revenue growth was driven by gross additions and Devcon
Security acquisition, partially offset by customer attrition.
Average revenue per customer increased 3.7% to $40.31 in the
reported quarter. ADT closed the quarter with 6.5 million
customer accounts, up 1.5% from last year.
Revenues for fiscal 2013 increased 2.5% year over year to $3,309
million. The fiscal revenues surpassed the Zacks Consensus
Estimate of 3,306 million.
Earnings before Interest, Taxes, Depreciation and Amortization
(EBITDA) stood at $425 million in the reported quarter, up 9.0%
year over year. EBITDA before special items was $431 million in
the reported quarter, up 7.5% year over year, and EBITDA margin
before special items was 50.9%, a 150 basis point improvement.
The year-over-year growth in margins was driven by favorable
impact from charges related to legal matters.
Balance Sheet and Cash Flow
Cash and cash equivalents as of Sep 2013 were $138 million, while
long-term debt aggregated $3,373 million. Cash from operating
activities totaled $1,666 million with free cash flow of $460
The company authorized a 60% increase in the company's quarterly
dividend to 20 cents per share, up from 12.5 cents per share,
beginning with the next dividend declaration.
The company repurchased 5 million of its shares for $206 million
during the reported quarter. Additionally, since quarter end, the
company has repurchased 7 million shares for $300 million.
Also, the company entered into an accelerated share repurchase
agreement, under which it will repurchase approximately $400
million of its common stock. Between the shares already
repurchased and the accelerated share repurchase program, the
company expects to complete the $2 billion share repurchase
program in the first half of fiscal 2014. As a result, the
company has increased the current share repurchase authorization
by an additional $1.0 billion.
Moving ahead, ADT expects recurring revenues and total revenue
growth to be in the range of 4%-5% in fiscal 2014. EBITDA margin
before special items is expected to improve 150 basis points over
a three-year period with a 50 basis point improvement in fiscal
Free cash flow before special items is expected to be in the
range of 5%-10%. The strategic move by the company is to grow
ADT's core business both organically and through acquisitions,
increase operating efficiency and return capital to its
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ADT currently has a Zacks Rank #3 (Hold). Other stocks that look
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