Will Tyco International Q4 Results Beat Estimates?

(RTTNews) - Swiss security products maker Tyco International (TYC) is due to release its fourth-quarter numbers before the bell on Friday, November 13.

The company continues to project fourth-quarter adjusted earnings in a range of $0.60 - $0.62 per share. This represents a 7% - 11% increase in earnings per share year over year compared to last year's fourth quarter earnings of $0.56 per share. Analysts polled by Thomson Reuters are estimating earnings of $0.61 per share on revenue of $2.55 billion.

The company expects fourth-quarter revenue of about $2.5 billion with negative 1% to flat organic revenue growth. On a reported basis, revenue is expected to decline about 6% year over year. Changes in foreign currency exchange rates are expected to result in a $195 million or 7% headwind to revenue. Net acquisition and divestiture activity is expected to contribute a benefit of 1%.

Also, Tyco expects continued solid operational execution with 120 basis points of segment margin expansion year over year, including the absorption of a 30 basis point headwind related to non-cash purchase accounting and a 40 basis point tailwind related to a legal matter in the prior year.

The company expects a seasonal decline in backlog in the fourth quarter, as a significant amount of electronic fire upgrade work is performed during the summer months.

For fiscal 2015, the company now expects adjusted earnings guidance in a range of $2.23 - $2.25 per share, compared to the previous projection of $2.23 - $2.27 per share. The Street is currently looking for full-year 2015 earnings of $2.24 per share.

In the last quarter, Tyco reported a steep decline in profit, reflecting lower operating margins and a revenue drop amid currency headwinds. Adjusted earnings per share from continuing operations topped analysts' expectations, while quarterly revenues missed their estimates.

Third-quarter net income attributable to ordinary shareholders was $156 million or $0.37 per share, sharply lower than the previous year's $1.45 billion or $3.11 per share.

Income from continuing operations for the quarter more than halved to $188 million or $0.44 per share from $435 million or $0.93 per share in the prior-year quarter.

Results for the latest quarter included net charges of $0.15 per share, while the year-ago quarter included net gains of $0.39 per share.

Before special items, adjusted income from continuing operations for the quarter was $251 million or $0.59 per share, compared to $254 million or $0.54 per share in the year-ago quarter.

On average, 15 analysts polled by Thomson Reuters expected earnings of $0.56 per share for the quarter. Analysts' estimates typically exclude certain special items.

Net revenue for the quarter decreased 6.4% to $2.49 billion from $2.66 billion in the same quarter of last year, and missed fourteen Wall Street analysts' consensus estimate of $2.52 billion.

Operating margin for the quarter contracted 100 basis points to 10.2% from last year's 11.2%.

"While we were disappointed with our top-line growth, we once again demonstrated our ability to leverage and accelerate internal productivity and cost containment initiatives to deliver on our earnings commitment for the quarter," CEO George Oliver said.