Tomahawk, WI 7/29/2013 (Basicsmedia) – Tyco International Ltd. (NYSE:TYC) is a Swiss security systems and fire detection systems company. Tyco released its 3Q2013 financial results that came in above market expectations but revealed a sharp fall in net income. The company has split itself into three distinct entities last year. The earnings of Tyco in 3Q2013 were $233 million. The non-GAAP earnings per share (EPS) were $0.50, about half of the EPS of $1.01 for 3Q2013. Analysts had expected earnings of $0.48 per share. GAAP EPS of $0.29 for 3Q2013 was also 44% lesser than $0.52 per share reported in 3Q2012.

The revenues of Tyco for 3Q2013 were $2.68 billion, 40% lesser than the revenue of $4.46 billion in the same quarter last year. Market estimates were $2.71 billion in revenues. Gross margins were 36.7%, operating margins were 9.2% and net margins were 5.0%. All these margins have declined from the prior year period.

Analysts forecast revenues of $2.79 billion and earnings of $0.54 per share for 4Q2013. The average revenue estimates and earnings estimate for FY2013 are $10.71 billion and $1.83 per share. Tyco had split into three separate publicly traded entities in September 2012. It converted its residential security business in North America as ADT Corp. It sold its flow control business to Pentair Ltd.

The company reported that the 3Q2013 revenues of the systems and installations segment of North America declined 4% from the previous year period to $966 million. The operating income for this segment was $88 million, while the operating margin was 9.1%. The systems and installations segment revenue for the rest of the world rose 2.1% to $1.1 billion. The operating income for this segment was $104 million, with the operating margin coming at 9.4%. Revenues from global products were $600 million, an increase of 7% from the year ago period. Operating income for 3Q2013 for this segment was $114 million, while operating margin was 19%.

Cash and cash equivalents of Tyco were $455 million for 3Q2013, while cash from operating systems was $265 million. The company repurchased 3.1 million of its shares for a value of $100 million under its share repurchasing program of $750 million.

Tyco signed an agreement for acquiring Exacq Technologies, a company that develops an open architecture system for surveillance and security applications, named as Video Management Systems (VMS). Even though the company did not reveal the amount involved for the acquisition, analysts believe that this acquisition can generate revenues around $75 million in FY2014.

Tyco also completed its acquisition of National Fire Solutions Group in 3Q2013. National Fire provides fire protection services, including installation, maintenance and inspection services in Australia. This acquisition can bring in revenues of $65 million to the company in FY2014.

Tyco believe that the strong balance sheet of the company will provide flexibility for funding organic as well as inorganic growth initiatives to maximise returns. Further, the acquisitions are accretive and will strengthen the position of Tyco in broadening its service and product offerings.

The stock of Tyco lost $0.56 or 1.59% on Friday to close at $34.59. The shares of Tyco were trading at $26.61 on November 14, 2012 but have gained ground since then to rise steadily due to greater investor confidence in Tyco’s future performance.

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