updated 8/2/2005 7:57:17 AM ET 2005-08-02T11:57:17

Manufacturing conglomerate Tyco International Ltd. said Tuesday its fiscal third-quarter earnings rose 29 percent, but revenue fell short of expectations and the company issued guidance below Wall Street targets for the fourth quarter and full year.

Net income rose to $1.19 billion, or 56 cents per share, from $923 million, or 43 cents per share, a year ago.

Excluding a gain from divestiture activity and a loss on early debt retirement, the company would have posted earnings from continuing operations of 50 cents per share in the latest quarter.

Third-quarter revenue grew 3 percent to $10.56 billion from $10.23 billion last year.

The results topped analysts' expectations for profit of 49 cents per share, but revenue fell short of Wall Street's $10.67 billion consensus estimate.

Tyco said cash flow from operating activities was $1.6 billion, and the company generated free cash flow of $1.25 billion in the quarter.

Looking ahead, the company expects fourth-quarter earnings from continuing operations, excluding special items, of 45 cents to 47 cents per share — below the current consensus analyst estimate of 52 cents per share. Tyco said fourth-quarter operating profit will fall below third-quarter levels due to lower operating income in its engineered products and services segment, primarily because of dynamics in the steel market, reduced revenue, and a modestly higher tax rate.

For the full year, Tyco now sees earnings from continuing operations excluding special items of $1.85 to $1.87 per share — below prior internal estimates and also shy of analysts' current forecast of $1.90 per share. The company expects full-year cash from operating activities of $6 billion to $6.4 billion and free cash flow of $4.2 billion to $4.6 billion.

In fiscal 2006, the company expects operating earnings per share to increase by about 10 percent over full-year 2005 results.

Tyco, which has about 250,000 employees, makes electronics and medical supplies and owns the ADT home security business. Nominally based in Bermuda, its operations headquarters are in West Windsor, N.J.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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