Tyco Posts $1.75 Billion Loss, Restates Some Prior Results

By Agence France-Presse Embattled conglomerate Tyco International Ltd. announced a quarterly loss of $1.75 billion, hurt by a whopping $2.8 billion write-down for restructuring and other charges. Tyco, whose former top executive faces criminal charges of looting the company, also restated some of its earlier results based on reviews of its accounting practices. Excluding special charges, the Bermuda-based industrial giant said it had earnings of 30 cents per share for the fiscal fourth quarter, below the Wall Street consensus estimate of 32 cents per share. Overall revenues from continuing operations in the fourth quarter were $9.36 billion, up 9.9% from the same period last year. The bulk of the special charges in the latest quarter were the result of a $2.2 billion write-down of the value of the firm's Tyco Telecommunications (TyCom) unit. There were also write-downs of certain investments, accounts receivable and inventory, the company said. TyCom also dented already-weak margins at the company's electronics division, which accounted for $2.6 billion of Tyco's revenues in the period. Tyco Chairman and CEO Ed Breen said the company posted "strong cash flow and revenues that exceeded the expectations we outlined in our Sept. 25 conference call ... [despite] a difficult economic environment and the issues facing the company." Tyco investigative lawyer David Boies said it is possible that the company will make further restatements of past earnings. Boies, who has been brought in to oversee a forensic accounting review of Tyco's books, said the review is about 60% complete. "It's possible that some disclosures will be made in addition to what was discussed," said the Boies. "But we have not found anything that would meaningfully diminish current earnings." Chief Financial Officer David Fitzpatrick said that the company has restated earnings related to its ADT unit after discovering that $135 million in fees on contracts had been booked up front instead of being deferred over the life of the contracts. Tyco's U.S. headquarters are in Exeter, N.H.