* Expects 2nd-qtr adj profit $0.37-$0.39/shr vs estimates
* First-quarter adj earnings $0.40/share vs estimates $0.39
* Revenue rises 5 pct
* Board proposes 7 pct hike in annual dividend
* Maintains full-year adj profit view of $1.75-$1.85/shr
By Bijoy Anandoth Koyitty
Jan 29 Tyco International Ltd, a fire
safety and security systems maker, reported better-than-expected
first-quarter results, helped by higher margins in its North
American business, but forecast the current quarter below
Operating margins in the fire detection and suppression
systems business, the company's second-largest division, rose
more than 2 percentage points in the quarter ended Dec. 28. The
business caters to customers mainly in North America.
Tyco said higher-margin service revenue accounted for a
larger portion of the revenue in the fire detection and
suppression systems business. A strong retail season also drove
margins for the business.
The company forecast second-quarter earnings, before items,
of 37 cents to 39 cents per share. Analysts on average were
expecting 42 cents, according to Thomson Reuters I/B/E/S.
Tyco, reporting only its second quarterly results as a
standalone company, said it expects "normal seasonality"
associated with a retail slowdown to hurt margins in its North
America installation and services business in the current
The company, which makes security applications used in fire
detection and suppression, split its operations into three units
in September. The North American home security arm, ADT,
operates as a separate company, while its flow control unit was
sold off to Pentair Ltd.
Vertical Research Partners analyst Jeff Sprague said there
won't be any "lingering" concerns about the second-quarter
"Looks to me like their full year is on track. They have
shown here very quickly, in their first quarter, the
independence out there ... getting after along the cost
reductions they had targeted."
Switzerland-headquartered Tyco's shares, which have gained
14 percent of their value in the last three months, were
slightly down at $30.57 in afternoon trading on the New York
Earnings from continuing operations rose to $159 million, or
34 cents per share, for the first quarter, from $98 million, or
21 cents per share, a year earlier.
Excluding items, the company earned 40 cents per share from
Tyco, which is focused on expanding its presence in
high-margin services and emerging markets following the split,
said it intends to spend about $200 million to $300 million on
mergers and acquisitions.
It reported cash and cash equivalents of $501 million in the
On a conference call with analysts, Tyco Chief Executive
George Oliver said the company is "excited about the pipeline of
potential acquisitions", but would buy back shares if the plan