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Non-Tech : Tyco International Limited (TYC) -- Ignore unavailable to you. Want to Upgrade?

To: Craig A who wrote (362)	10/27/1999 12:28:00 PM
From: LTBH	Respond to of 3770

Comment on BW Article messages.yahoo.com Seems you must buy at the news stand. Those who thought they read it online haven't come up with a link (and may only be passing on someone else's opinion). Networm

To: Craig A who wrote (362)	10/27/1999 1:19:00 PM
From: LTBH	Read Replies (1) \| Respond to of 3770

BW Text Now Posted on Yahoo TYC forum, quite long and, to me, a very negative article. Just an excerpt: But can that hellbent-for-leather attitude survive a slowdown? Standard & Poor's Ratings Service, which is owned by BUSINESS WEEK parent The McGraw-Hill Companies Inc., last month downgraded the outlook for Tyco's A- debt rating from stable to negative on concerns over the company's ballooning debt, which has more than tripled, to $10 billion, in two years. Even fans such as Harvard business school professor Cynthia A. Montgomery, who praised the company's track record in a case study, see reason for caution. ''While Tyco is going incredibly fast, they haven't weathered many storms,'' she says. And for now, the wind is at gale force. Wall Street's short sellers have long whispered about Tyco's accounting, but the Tice report went off like a firecracker. The detailed and highly technical analysis charges that Tyco has aggressively managed its accounting to produce such eye-popping numbers. More ominously, Tice argues the game is nearly up. He believes that with one earnings stumble, it won't have the stock value to continue making the big acquisitions that are the foundation of Kozlowski's strategy. Tice isn't alone in questioning the rosy growth picture reflected in Tyco's reported results. Forensic accountant Howard M. Schilit's company, Center for Financial Research & Analysis Inc., says it spent more than 250 hours poring over Tyco's reports. Brad Rexroad, an analyst at the center, says he found a ''recurring theme'' of accounting strategies designed to pump up earnings growth. The problems, he alleges, center around Tyco's aggressive merger-related accounting, including deliberately depressing the restated results of acquired companies before the deals closed ''to make the future results look better.'' Though everything is completely legal under generally accepted accounting principles (GAAP), says Rexroad, ''if you cut off the acquisition pipeline and all the tricks they are playing, the earnings growth rate would be far less than what is being reported.'' Networm