The 10-second takeaway
For the quarter ended June 28 (Q3), Tyco International met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped significantly. Non-GAAP earnings per share contracted significantly. GAAP earnings per share shrank significantly.
Margins contracted across the board.
Tyco International reported revenue of $2.68 billion. The 11 analysts polled by S&P Capital IQ looked for a top line of $2.71 billion on the same basis. GAAP reported sales were 40% lower than the prior-year quarter's $4.46 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.50. The 14 earnings estimates compiled by S&P Capital IQ forecast $0.48 per share. Non-GAAP EPS of $0.50 for Q3 were 50% lower than the prior-year quarter's $1.01 per share. (The prior-year quarter included -$0.02 per share in earnings from discontinued operations.) GAAP EPS of $0.29 for Q3 were 44% lower than the prior-year quarter's $0.52 per share. (The prior-year quarter included -$0.02 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 36.7%, 290 basis points worse than the prior-year quarter. Operating margin was 9.2%, 40 basis points worse than the prior-year quarter. Net margin was 5.0%, 40 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $2.79 billion. On the bottom line, the average EPS estimate is $0.54.
Next year's average estimate for revenue is $10.71 billion. The average EPS estimate is $1.83.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 486 members out of 533 rating the stock outperform, and 47 members rating it underperform. Among 148 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 144 give Tyco International a green thumbs-up, and four give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Tyco International is outperform, with an average price target of $34.14.
Looking for alternatives to Tyco International? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.
- Add Tyco International to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.