10-year

10-Year Anniversary Promotion (20% off)

Join GuruFocus Premium Membership Now for Only $279/Year

Once a decade discount

Save up to $500 on Global Membership.

Don't Miss It !

Free 7-day Trial
All Articles and Columns »

TYCO INTERNATIONAL LTD. (SWITZERLAND) Reports Operating Results (10-Q)

January 27, 2011 | About:
10qk

10qk

18 followers
TYCO INTERNATIONAL LTD. (SWITZERLAND) (TYC) filed Quarterly Report for the period ended 2010-12-24.

Tyco Intl Ltd has a market cap of $21.84 billion; its shares were traded at around $44.63 with a P/E ratio of 16.6 and P/S ratio of 1.3. The dividend yield of Tyco Intl Ltd stocks is 1.9%.Hedge Fund Gurus that owns TYC: Lee Ainslie of Maverick Capital, Andreas Halvorsen of Viking Global Investors LP, Larry Robbins of Glenview Capital, Michael Price of MFP Investors LLC, Steven Cohen of SAC Capital Advisors, Paul Tudor Jones of The Tudor Group, Manning & Napier Advisors, Inc, George Soros of Soros Fund Management LLC, Bruce Kovner of Caxton Associates. Mutual Fund and Other Gurus that owns TYC: Wallace Weitz of Weitz Wallace R & Co, Bill Nygren of Oak Mark Fund, David Williams of Columbia Value and Restructuring Fund, David Williams of Columbia Value and Restructuring Fund, Dodge & Cox, HOTCHKIS & WILEY of Hotchkis & Wliey Capital Management LLC, Chris Davis of Davis Selected Advisers, Mario Gabelli of GAMCO Investors, John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Pioneer Investments, Donald Yacktman of Yacktman Asset Management Co., John Keeley of Keeley Fund Management, Jean-Marie Eveillard of First Eagle Investment Management, LLC.

Highlight of Business Operations:

Additionally, during the third quarter of fiscal 2010, our Board of Directors approved a plan to sell our European water business, which was part of our Tyco Flow Control segment. The business met the held for sale and discontinued operations criteria and has been included in discontinued operations for all periods presented. On September 30, 2010, we completed the sale of this business and received net cash proceeds of approximately $264 million, net of $7 million of cash divested on sale, and we recorded a pre-tax gain of $173 million, which was largely exempt from tax. The gain was recorded in income from discontinued operations, net of income taxes in the Company's Consolidated Statement of Operations.

Operating income for the quarter ended December 24, 2010 was $706 million compared to operating income of $405 million for the quarter December 25, 2009. The increase in operating income of $301 million reflects strong growth in our Tyco Security Solutions business and, a net gain of $259 million, subject to the settlement of the final working capital adjustment, related to the sale of a majority interest in our Electrical and Metals business, partially offset by restructuring charges and losses on other divestitures of $32 million and $13 million, respectively, during the quarter ended December 24, 2010 compared to $11 million and $1 million of restructuring and divestiture charges, respectively, recorded during the quarter ended December 25, 2009.

As of December 24, 2010, our cash balance was $2.1 billion, as compared to $1.8 billion as of September 24, 2010. We generated approximately $246 million and $389 million of cash from operating and investing activities, respectively, and utilized $345 million of cash in financing activities. During the quarter ended December 24, 2010, $1.0 billion of cash was generated from divestitures, primarily related to $713 million for the sale of the majority interest in our Electrical and Metal Products business and $264 million for the sale of our European water business, which was presented in net cash provided by (used in) discontinued investing activities in our Consolidated Statement of Cash Flows. During the quarter ended December 24, 2010, uses of cash primarily included $500 million to repurchase our common shares, $179 million of capital expenditures, $133 million to purchase customer contracts in our Tyco Security Solutions business and $113 million to pay cash dividends. We expect to continue to use our cash to fund internal growth opportunities, improve productivity across all of our businesses, make acquisitions that strategically fit within our businesses and return capital to shareholders.

Approximately 43% and 46% of Tyco Security Solutions' total net revenue for the quarters ended December 24, 2010 and December 25, 2009, respectively, was non-recurring in nature. Non-recurring net revenue increased by $25 million, or 2.8%, to $905 million primarily due to an increase in product sales of $28 million partially offset by a decline in other non-recurring revenue of $3 million. Product sales primarily increased as a result of strength in the commercial end markets for the first time in over a year.

Net revenue in EMEA decreased by $56 million, or 11.5%, as compared to the quarter ended December 25, 2009 due to divested revenue of $62 million primarily related to our French security business. Revenue also decreased in the United Kingdom and Continental Europe as a result of adhering to operating margin requirements for new projects. In addition, changes in foreign currency exchange rates unfavorably impacted net revenue by $12 million, or 2.4%. These decreases were partially offset by an increase in revenue from South Africa as management continues to focus on expanding its customer account and recurring revenue in this market.

Net revenue in ROW increased by $26 million, or 8.8%, as compared to the quarter ended December 25, 2009 due to an increase in revenues from emerging markets including Asia Pacific of $15 million and $11 million in Latin America as management continues to focus on expanding its customer account and recurring revenue in these markets. Changes in foreign currency exchange rates favorably impacted net revenue by $9 million, or 3.1%.

Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 3.3/5 (3 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK