Fire safety and security system maker Tyco International Ltd. (TYC) said Tuesday morning that earnings in the first quarter dove 49.4 percent, but adjusted income rose amidst benefits from acquisitions as the company shuffled its operations.
The Schaffhausen, Switzerland-based company reported $163 million, or 34 cents per share, in GAAP earnings from continuing operations for the fiscal first quarter of 2013, which were down from $322 million, or 69 cents per share, in the year earlier quarter. Excluding special items, however, adjusted earnings totaled $191 million, or 40 cents per share, up by 54 percent from $123 million, or 26 cents per share, in the fiscal Q1 2012.
Revenue rose 5 percent from $2.48 billion in the year earlier quarter to $2.6 billion, including a 3 percent benefit from acquisitions.
Analysts, who typically do not include special items, were predicting earnings of 39 cents per share revenue of about $2.57 billion.
"We're off to a great start as the new Tyco, integrating our fire and security businesses and executing on our growth strategy. We had another very good quarter, with a 5% increase in revenue, driven partly by our acquisition strategy, and an 11% increase in earnings per share before special items on a normalized basis,” said Tyco Chief Executive Officer George Oliver.
In the fall of 2012, Tyco re-vamped its structure by breaking the company into separate channels, including the forming of ADT Corp. (ADT) for its security business, merging its pipe and valve operations with Pentair Inc. (PNR) and keeping its core competency on commercial fire suppression and safety equipment. The discontinuation of operations clouded earnings dramatically compared to fiscal Q1 of 2012.
Income from discontinued operations was $224 million the year earlier, compared to $4 million in the latest quarter.
Operating income from North American system installations and service grew 26 percent from $86 million to $108 million as operating margin increased from 8.9 percent to 11.1 percent from Q1 2012 to Q1 2013. For the rest of the world, operating income grew 4 percent to $114 million.
Shares of TYC have appreciated by about 33 percent since January 2012, including hitting their highest level since January 2002 this month. Shares closed on Monday at $30.70.