ADT posts higher quarterly profit as sales increase
(Reuters) - Home security services company ADT Corp (ADT.N), formerly a part of Tyco (TYC.N), reported a higher quarterly profit on Wednesday.
The company said net earnings had risen 12.9 percent to $105 million, or 44 cents per share, in the first quarter ended on December 28 from $93 million, or 39 cents per share, a year earlier.
The latest results exceeded analyst's expectations of 43 cents per share, according to Thomson Reuters I/B/E/S.
Shares of ADT were up 2.9 percent at $47.88 in morning trading.
Sales rose 1.8 percent to $809 million, with recurring revenue from existing customers increasing 5.1 percent from a year earlier.
"It was a very solid quarter," Chief Executive Officer Naren Gursahaney told Reuters. "I want to see us growing gross adds faster, but we understand the headwinds we faced in the first quarter, and we're addressing them."
Gursahaney said results suffered because of Superstorm Sandy, which struck the U.S. Northeast in late October.
Sales of Pulse, a home monitoring product that allows consumers to remotely control settings like lighting and thermostats, are poised to accelerate in the coming year, Gursahaney said.
Introduced in October 2010, Pulse serves just 4 percent of ADT's 6.4 million users, but according to the company's earnings statement, 19 percent of new customers chose to adopt the product in the last quarter, up from 7 percent a year earlier.
"I think we're already delivering take rates that we thought would be the cap," said Gursahaney. "The results show me that we have more upside there."
Gursahaney also expects business to grow out of ADT's expansion into lifestyle services. The company's partnership with health technology company Ideal Life will integrate weight, blood pressure and other readings from medical devices into ADT's monitoring systems.
"You're checking at home, and the information goes straight to your caregiver," said Gursahaney. "They can either update it, or if there's reason for concern, they can bring you in."
The Boca Raton, Florida-based company said it still expected a rise of 4.9 percent to 5.2 percent in recurring revenue in fiscal 2013.
ADT also announced a $600 million accelerated share repurchase.
(Reporting by Atossa Araxia Abrahamian; Editing by Lisa Von Ahn)
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