Wednesday, Tyco Electronics Ltd. (TEL) reported a profit in its third quarter, compared to a loss last year, reflecting significantly lower one-time charges. On an adjusted basis, earnings per share grew 43%, and topped the market projections. Net sales climbed 19% on strong segmental sales growth. Further, the engineered electronic components provider issued fourth-quarter earnings forecast, and tightened fiscal 2008 earnings guidance range. Tyco also said its Board authorized a $750 million increase in the share repurchase program.
Third-quarter net income was $330 million or $0.68 per share, compared to loss of $1.37 billion or $2.75 per share last year. Income from continuing operations was $317 million or $0.66 per share, compared to loss of $933 million or $1.88 per share last year.
The 2008-results included $0.04 per share of net charges, comprising $0.02 per share of restructuring costs and a $0.02 per share charge related to the company's portion of a Tyco International securities litigation settlement. In the prior-year quarter, results included $2.37 per share of charges.
Excluding one-time items, adjusted income from continuing operations increased to $335 million from $242 million last year. Adjusted earnings per share from continuing operations climbed 43% to $0.70 from last year's $0.49, and topped the $0.67 per share of average estimate of ten analysts polled by First Call/Thomson Financial.
Net sales climbed 19% to $3.91 billion from $3.29 billion last year. Excluding currency effects, organic sales growth was 11%. Analysts estimated revenues of $3.80 billion. Total company orders grew 28% from last year.
Electronic components segment sales grew 15%, Network Solutions segment sales rose 15%, Undersea Telecommunications segment sales surged 81%, and Wireless Systems segment sales climbed 46% in the quarter.
Operating income was $537 million, compared to an operating loss of $507 million in the prior-year period. Adjusted operating income climbed 22% year-over-year to $560 million.
Tyco Electronics Chief Executive Officer Tom Lynch said, "In the third quarter, we continued to benefit from the breadth of our business, which enabled us to grow 11 percent organically. This growth, coupled with improved operating leverage in our Electronic Components segment and a favorable sales mix in our Undersea and Wireless segments, resulted in a 22% increase in operating income."
For the first nine months of fiscal 2008, the company's net income was $1.58 billion or $3.22 per share, compared to loss of $810 million or $1.63 per share last year. Income from continuing operations was $1.49 billion or $3.03 per share, compared to loss of $417 million or $0.84 per share in the previous year. Adjusted income from continuing operations climbed to $973 million or $1.99 per share from $781 million or $1.57 per share last year. Year-to-date sales grew to $11.13 billion from $9.47 billion a year ago.
Looking ahead for the fourth quarter, earnings per share from continuing operations is estimated to be between $0.56 and $0.58, including restructuring costs of approximately $0.09 per share. Adjusted earnings per share from continuing operations are expected to be $0.65 to $0.67, an increase of 12% to 16% from last year.
Tyco expects fourth-quarter sales growth of 6% to 8% from prior-year sales of $3.5 billion, with organic sales growth of 1% to 2%. Analysts expect earnings of $0.69 per share on sales of $3.87 billion for the fourth quarter.
Lynch further noted that "In the fourth quarter, we again expect double-digit EPS growth and solid cash flow. Our organic growth outlook reflects some recent softening of order rates in the automotive and telecom service provider markets. We continue to expect solid growth in the majority of our industrial and infrastructure businesses".
Tyco now expects fiscal 2008 adjusted earnings from continuing operations of $2.63 to $2.65, compared to previous outlook of $2.60 to $2.66 per share. The revised outlook represents an increase of 23% to 24% from last year's $2.14 per share.
The company also expects full-year sales growth of 14% to 16% with organic sales growth of 7% to 9%.
Analysts estimate full-year earnings of $2.65 per share on sales of $14.93 billion.
Tyco said its Board of Directors has authorized a $750 million increase in the company's share repurchase program, bringing the total share repurchase program authorization to $2.0 billion.
TEL closed Tuesday's regular trading session at $35.57, up $0.06, on a volume of 4 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.