Tyco International (TYC), a provider of pure-play fire protection and security company, has announced a 10.74 times jump in profit for the quarter ended Jun. 27, 2014, helped by income from discontinued operations. The company earned $1,450 million or $3.11 a share in the third-quarter compared with $135 million or $0.28 a share a year ago.
The company has recorded income from discontinued operations of $1,016 million for the third-quarter.
Revenue during the third-quarter climbed 4.93 percent to $2,662 million from $2,537 million in the last year period.
Gross margin expanded by 27 basis points over the last year period to 36.96 percent. Total expenses as a percentage of revenues decreased to 89.18 percent from 94.25 percent in the same period last year. That has resulted in improvement of 473 basis points in operating margins to 11.12 percent.
The company reported operating income of $296 million, compared with $162 million in the previous year period.
''The investments we have made to expand our product capabilities, combined with continued improvements in our operational execution, drove a 17% increase in earnings per share before special items in the quarter,'' said Tyco chief cxecutive officer George R. Oliver.
Cash Flow
Tyco International has generated cash of $520 million from operating activities during the nine month period, up 44.44 percent or $160 million when compared with the last year period. The company has generated 6.81 cents of operating cash flow in every sales dollar for the nine month period, up from 4.82 cents in the same period last year.
The company has spent $83 million cash to meet investing activities during the nine month period, as against cash outgo of $363 million in the last year period. It has made net capital expenditure of $203 million during the nine month period, which was higher by 1.00 percent or $2 million, from a year ago.
The company's free cash flow accounted for 60.96 percent of operating cash flow for the nine month period, compared with 44.17 percent in the last year period.
The company has generated net cash of $920 million from financing activities during the nine month period, as against cash outgo of $370 million in the last year period. It has made net repayment of $1 million debt during the nine month period. It has spent net of $727 million on repurchase of common stocks.
The company's cash dividend payment increased 7.94 percent or $17 million to $231 million. Dividend payment accounted for 44.42 percent of operating cash flow for the nine month period, compared with 59.44 percent in the same period previous year.
As on Jun. 27, 2014, the company's cash balance stood at $1,912 million, up 320.22 percent or $1,457 million from Jun. 28, 2013.
Working Capital
Tyco International has witnessed an increase in the working capital over the last one year. The company's working capital stood at $2,460 million as at Jun. 27, 2014, up $1,633 million or 197.46 percent from $827 million on Jun. 28, 2013. It registered an increase in current ratio to 1.75 as at Jun. 27, 2014 from 1.26 on Jun. 28, 2013.
Debt Position
Tyco International has witnessed a decline in the total debt over the last one year. As on Jun. 27, 2014, total debt stood at $1,463 million, down 1.22 percent or $18 million, from Jun. 28, 2013.
The company's total debt was 11.45 percent of total assets as on Jun. 27, 2014, compared with 12.48 percent on Jun. 28, 2013.
Interest coverage ratio, which determines how easily a company can pay interest expenses on outstanding debt, has improved to 12.33 from 6.23 in the same period last year.
Shares of Tyco International gained $0.40 or 0.89 percent to settle at $45.21 on Friday.
