* Q2 shr $0.73 vs. Wall Street view $0.68
* Q2 sales $3.99 bln
* Sees Q3 EPS $0.70 vs. $0.79 Wall St view
* Shares down 1.4 percent
(Adds 2011 outlook, CEO comments, share movement)
NEW YORK, April 28 Tyco International Ltd
TYC.N, which is at the center of takeover speculation, beat
Wall Street earnings forecasts on Thursday on strength at its
core security division, but forecast current-quarter results
below analysts' expectations.
Shares of the maker of security systems for homes and
businesses fell 1.4 percent to $48.20 in premarket trading.
Tyco, which also makes fire and safety equipment and valves
for the energy industry, said increased corporate expenses and
a higher tax rate would pressure results this quarter despite
better business conditions.
It estimated earnings of 70 cents a share. Analysts on
average have expected 79 cents, according to Thomson Reuters
However, Tyco raised its full-year forecast, saying it
expected a profit of $3.02 to $3.07 per share from continuing
operations, which brackets analysts' estimates of $3.05.
In its second quarter ended on March 25, Tyco earned $315
million, or 67 cents per share, up from $310 million, or 65
cents per share, a year earlier.
Earnings from continuing operations, excluding special
items, were 73 cents per share, 5 cents ahead of analysts'
Sales slipped 2 percent to $3.99 billion, matching
forecasts. Year-earlier revenue included a business in which
Tyco sold a majority stake. Excluding those results, sales were
up 6 percent.
The security solutions business showed a 12 percent revenue
increase, but profit there jumped 25 percent amid demand from
commercial customers and growth in recurring service revenue,
which commands a higher margin.
Tyco completed its $1.9 billion acquisition of Broadview
Security in May 2010, expanding its security offerings while
raising the number of their customers to almost 9 million
That access to people's homes has made Tyco attractive as a
potential takeover target.
People familiar with the matter have said France's
Schneider Electric SA (SCHN.PA) held early discussions about
buying the company, which lifted Tyco shares to nearly
three-year highs. Schneider's CEO later ruled out a deal that
size, and Tyco shares retreated. [ID:nLDE73J1X1]
Asked on Thursday's conference call whether Tyco should
remain a stand-alone company, Chief Executive Officer Ed Breen
said: "We like the portfolio how it is, (but) we always look at
all the other alternatives to see if something makes more
Breen did not directly address Schneider. In the past, the
company has declined to comment on speculation.
(Reporting by Nick Zieminski; Editing by Lisa Von Ahn)