Business life: My finance news blog

Diversified manufacturer Tyco International Ltd. said Tuesday that per-share profit for fiscal 2009 will fall short of Wall Street estimates.

In releasing its fiscal fourth-quarter earnings,Tyco (TYC) said it expects earnings per share for the new year to be $2.20 to $2.50.

Analysts surveyed by Thomson Reuters expect per-share earnings for 2009 to be $3.01.

Shares tumbled $3.36, or 13%, to $21.98 in early afternoon trading.

Edward D. Breen, chairman and chief executive officer, told analysts in a conference call that currency translation could cut per-share earnings about 38 cents and that per-share earnings at the electrical and metal products business could drop by 35 cents.

"While this estimate may be too harsh, we think it’s prudent to be conservative in this environment," he said.

Tyco said its electrical and metal products business that manufactures steel tubes and pipes, electrical conduit, armored wire and cable, metal framing systems and building components, will feel an impact from declining steel prices short term cash loans.

More than 50% of Tyco’s revenue is generated outside the United States, the company said. At current exchange rates, Tyco said it has seen about a 20% devaluation in non-US currencies, which it said will cut revenue by about 10 percentage points in 2009.

However, Tyco said it will benefit next year from improved operating performance, additional restructuring and a lower tax rate, Breen said.

Tyco said per-share earnings in 2008 were $3.06, above the $2.99 expected by analysts, according to Thomson Reuters. 

Source