Tyco International Ltd.
) reported strong results for the third quarter of 2012. Earnings
for the quarter (excluding one-time items) grew 19% year over year
to $1.01 a share. Earnings were also 8.6% above the Zacks Consensus
Estimate of 93 cents.
GAAP earnings for the quarter were 54 cents a share, which were
down 29% year over year compared to 76 cents reported in the
Revenue for the quarter grew 4% year over year to $4.5 billion.
Organic revenue (revenue excluding the impact of foreign exchange
translation and acquisitions) growth was 5%.
Effective second quarter 2012, the company has reorganized its
business segments as Fire & Security, ADT and Flow Control.
Fire & Security
Revenue for the quarter increased 3% to $2.6 billion. Organic
revenue for the quarter grew 4.0% partially offset by 4%
unfavorable foreign exchange. Organic revenue grew 4% with 10%
growth in products, 3% growth in service and modest growth in
Excluding the impact of foreign currency, orders increased 9%
year-over-year and backlog increased 1.5% to $4.7 billion, both on
quarterly and sequential basis.
Revenue for the quarter grew 4% year over year to $815 million
with organic revenue growth of 4.5%. Recurring revenue growth of
5.6% was primarily driven by 3.6% growth in average revenue per
user (ARPU) and 1.4% growth in customer accounts.
The 13.5% attrition rate for the quarter increased 30 basis
points sequentially primarily due to planned price escalations and
higher relocations. Non-recurring revenue declined 4.3% reflecting
a business model change to more ADT-owned systems.
Revenue for the quarter grew 6% year over year to $981 million
including a 5.5% decline due to changes in foreign currency.
Organic revenue grew 10% with 7% growth in Valves, 26% growth in
Water and 4% growth in Thermal Controls.
Excluding the impact of foreign currency, orders increased 5%
year-over-year and backlog was in line with the prior quarter at
Balance Sheet and Share Repurchase
For the third quarter of 2012, cash from operating activities
was $776 million while free cash flow (after deducting capex) was
$341 million. Cash and cash equivalents for the quarter were $1.1
During the third quarter of 2012, the company repurchased 3.7
million shares for $200 million.
The company has reported a strong third quarter performance,
driven by robust organic revenue growth. Order momentum over the
last few quarters, coupled with continued growth in the ADT
Residential business, continues to drive higher top-line
Tyco's large and stable base of recovering and service revenue,
which represented 45% of its revenue in the quarter, coupled with
strong operating leverage led by the Fire and Security
manufacturing businesses, drove the operating performance during
the reported quarter. All the three operating segments of the
company also posted strong revenue growth.
Tyco International currently has a Zacks Rank #3, which implies
a short-term Hold rating on the stock.
TYCO INTL LTD (TYC): Free Stock Analysis Report
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