UPDATE 2-Tyco International profit tops expectations

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NEW YORK, July 31 (Reuters) - Tyco International Ltd (TYC.N) reported higher-than-expected quarterly profit from continuing operations on Thursday as operating income increased in each of its five divisions, and the industrial conglomerate raised its full-year forecast.

"The beat was broad based with every segment delivering better-than-expected sales and margins," JP Morgan analyst Stephen Tusa said in a research note, adding that the company raised its year forecast by more than its third-quarter beat.

"The stock should be up today," Tusa said.

Tyco shares gained 4.7 percent in premarket trading.

The maker of everything from ADT security systems to fire safety systems and valves used in energy production said earnings from continuing operations before special items rose 69 percent to $429 million, or 88 cents per share, in the third quarter that ended on June 27, from $254 million, or 51 cents per share, a year earlier.

Analysts on average expected a profit of 67 cents per share, according to Reuters Estimates.

Revenue rose 11 percent to $5.22 billion, compared with Wall Street forecasts of $5.15 billion. Growth from existing businesses accounted for more than half of the increase, and all five business segments posted sales gains.

Tyco's biggest segment, the ADT security business, reported a 17 percent increase in operating income, although profit margins were down slightly. In that segment, international strength offset weakness in the retail market.

In the valves and thermal control business, profit rose 23 percent, and margins increased. Earnings also increased in Tyco's three other segments.

Now in its fourth quarter, Tyco raised its fiscal-year estimate of earnings from continuing operations to a range of $2.97 to $2.99 per share from its earlier outlook of $2.65 to $2.75. Analysts were expecting $2.76. The company had also raised its 2008 forecast twice before, in May and January.

Tyco's quarterly net profit, a less meaningful performance measure given its recent portfolio transformation and large recent charges, was 98 cents per share, compared with a year-earlier net loss of $7.18.

Last year, the company spun off its huge electronics and health-care businesses into separate publicly traded companies, and paid billions to settle securities litigation.

Tyco shares rose to $44.50 from their Wednesday close of $42.51 in premarket trading. (Reporting by Nick Zieminski; Editing by Lisa Von Ahn and Maureen Bavdek)