Wednesday, technology company Tyco Electronics Ltd. (TEL) reported a net loss for the third quarter that reflected primarily a loss from the discontinued Wireless Systems business. On a continuing operations basis, earnings plunged from last year, hurt in large part by a 34% decline in sales and restructuring charges, but came in above analysts' estimates.
Net loss for the quarter was $74 million or $0.16 per share compared with net income of $330 million or $0.68 per share in the same period last year.
Income from continuing operations for the quarter plunged to $26 million or $0.06 per share from $285 million or $0.59 per share in the corresponding period last year. Included in the earnings per share from continuing operations were $0.11 per share of restructuring charges.
The company said beginning in the third quarter the Wireless Systems business, which was sold for $665 million cash, is included in discontinued operations.
Adjusted income from continuing operations slid to $77 million from $303 million in the year-ago quarter. Adjusted earnings per share declined 73% to $0.17 from $0.63 per share in the corresponding period last year. On average, eight analysts polled by Thomson Reuters expected the company to earn $0.14 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales decreased 34% to $2.51 billion from $3.78 billion in the prior-year period. Six Street analysts expected the company to report sales of $2.49 billion for the quarter.
Tyco said total company orders declined 43% overall and 38% organically compared to the prior year. Excluding the company's Undersea Telecommunications segment, which is a project-oriented business with uneven order patterns, orders decreased 35% overall and 30% organically in the quarter
The company said on July 27, its Board recommended a dividend in the form of a capital reduction of $0.16 per share for each of the first and second quarters of fiscal 2010, subject to shareholder approval.
For the nine-month period, net loss was $3.35 billion or $7.31 per share compared with net income of $1.58 billion or $3.22 per share in the year-ago period. Loss from continuing operations was $3.18 billion or $6.95 per share compared with income from continuing operations of $1.44 billion or $2.94 per share in the same period last year. Net sales declined to $7.56 billion from $10.8 billion in the prior-year period.
Looking ahead, for the fourth quarter, the company expects GAAP earnings from continuing operations to be in a range of $0.15 to $0.22 per share, including restructuring and other charges of about $0.11 per share and about $0.04 per share related to a net gain on early retirement of debt.
In addition, adjusted earnings from continuing operations are expected to be in a range of $0.22 to $0.29 per share. Street analysts currently expect the company to earn $0.15 per share for the quarter.
Tyco Electronics Chief Executive Officer Tom Lynch said, "Our outlook assumes a slight sequential improvement in sales and continued margin improvement due to productivity gains and increased manufacturing utilization."
TEL closed Tuesday's regular trading session at $20.66.
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