Summary
This report covers the fiscal quarter ended December 30, 2005, for Tyco International Ltd. The company reported net income of $570 million, or $0.28 per diluted share, compared to $730 million, or $0.34 per diluted share, in the same quarter of the prior year. Revenue saw a modest increase to $9.7 billion from $9.6 billion year-over-year, primarily driven by growth in the Electronics and Engineered Products and Services segments. However, operating income declined by 10.6% to $1.225 billion due to increased material costs, unfavorable foreign currency movements, and the adoption of SFAS No. 123R impacting share-based compensation expenses. The company is actively managing its portfolio, with significant progress in divesting its Plastics and Adhesives segment, which was impaired by $275 million due to market conditions. Tyco also announced a significant strategic plan to separate into three independent, publicly traded companies: Tyco Healthcare, Tyco Electronics, and a combined Fire and Security and Engineered Products and Services entity, expected to be completed by early 2007. This separation is a key strategic initiative aimed at unlocking shareholder value and positioning each business for future growth.
Key Highlights
- 1Net income for the quarter was $570 million, down from $730 million in the prior year's quarter.
- 2Net revenue increased slightly to $9.7 billion from $9.6 billion year-over-year.
- 3Operating income decreased by 10.6% to $1.225 billion, impacted by various cost pressures and currency headwinds.
- 4The company recorded a significant impairment charge of $275 million related to its Plastics, Adhesives, and Ludlow Coated Products businesses, which are designated for divestiture.
- 5Tyco announced a plan to separate into three independent publicly traded companies, expected to be completed by early calendar 2007.
- 6Shareholders' equity remained stable at $32.5 billion.
- 7The company repurchased approximately $216 million of its common shares in the first quarter of 2006.