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Tyco posts strong 3Q
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July 20, 1999: 8:57 a.m. ET
Firm also declares stock split, will sell some of its businesses
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NEW YORK (CNNfn) - Tyco International Ltd. posted fiscal third-quarter results Tuesday exceeding Wall Street forecasts by a nickel per share, announced a 2-for-1 stock split, and said it expects to get about $1 billion cash from the sale of some of its flow control businesses.
Boosted by sizable earnings increases in each of its four business segments in the quarter ended June 30, the diversified manufacturing and service company reported net income of $699.4 million, or 84 cents a diluted share, excluding acquisition and other non-recurring charges. The results reflect a more than 70 percent increase overall compared with the $400.1 million, or 49 cents per share, posted in the year-ago quarter.
The 1998 results were restated to reflect its mergers with AMP Inc. and U.S. Surgical, both of which were accounted for as a pooling of interests, and represent the company's income before one-time charges.
Analysts' consensus estimate for Tyco's third quarter was 79 cents a share, according to forecast-tracking firm First Call.
Sales for the quarter grew 18 percent to $5.82 billion from $4.95 billion a year earlier.
Nine-month earnings jump
Before one-time charges and extraordinary items, Tyco posted income of $1.78 billion, or $2.14 a diluted share, for the first nine months. That's well above the $1.20 billion, or $1.49 per share, in the year-ago period.
Sales climbed 17 percent to $16.27 billion from the $13.95 billion a year ago.
Tyco's third-quarter earnings grew 55 percent in its health care and specialty products segment; 45 percent in fire and security services; more than 100 percent in its electrical and electronic components division; and 28 percent in its flow control businesses.
"We continue to benefit from strong organic revenue growth and margin expansion enhanced by the integration of synergistic acquisitions," said L. Dennis Kozlowski, chairman and CEO, who noted the company's recently announced purchase of Raychem is expected to close in August.
"Additionally, the company's free cash flow (operating cash less capital expenditures and dividends) for the quarter was in excess of $800 million, a record high," he said.
Kozlowski said the company plans to sell certain of its flow control businesses by the end of the fiscal year. The divestitures are expected to yield cash about $1 billion cash. Combined with the strong cash flow, he said, they "well position our Company for future earnings growth."
Two-for-one split on tap
Encouraged by its third-quarter performance and outlook for future growth, Tyco declared a two-for-one stock split on its common shares, in the form a 100 percent stock distribution payable Oct. 21 to shareholders of record Oct. 1.
Shares of Tyco (TYC) closed up 1-11/16 to 101-3/16 on Monday. 
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Tyco International
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