Stock Market Update - Thu Nov 15 08:35:02 EST 2007

Showing signs of broad-based growth, Tyco International (TYC) reported a solid fourth quarter in which  revenues increased 9% to $5.03 billion and adjusted earnings per share grew 21% to $0.57 per share, when compared with the same period last year.  The results surpassed analysts' estimates, which called for revenues of $4.93 billion and earnings of $0.55 per share. 

Tyco's year-over-year performance on a segmented basis was mixed even though each division saw revenue increases.  The company's ADT security system unit increased adjusted operating income 3% to $257 million, but the segment's operating margin declined 40 basis points to 12.9%.  Fire Protection Services suffered a 3% decline in adjusted operating income, which reduced operating margins 90 basis points to 9.5%.  While Flow Control increased adjusted operating income 22% to $135 million, operating margins still lost 10 basis points to 12.6%.  Electrical and Metal operating income declined 37% to $52 million and operating margins lost 590 basis points to 9.8%.  Safety Products increased operating income 10% to $88 million, while the segment's operating margin increased 70 basis points to 19.2%.

Controlling expenses and stabilizing margins will continue to challenge management in the near-term.  Fresh from its breakup, core operations have remained intact, but the company will need to work through remaining snares to streamline operations.