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

To: JDN who wrote (3724)	11/16/2006 10:19:17 PM
From: rich evans	Respond to of 3770

Tyco estimates of Q1 are conservative and 2cents a share low.Tyco did 51cents a share in Q4 . Tyco always gives low guidance these days so as not to dissapoint like it did in 2005. Margins for tyco will stay the same in Q1. In electronics copper prices used were 3.70/lb in Q4. In Q1 copper will be 3.10lb. 50mill lbs equals a saving of 30million dollars to bottom line. Electronics revenue growth will be 7% per CC in Q1 year to year but less then Q4.But margins will improve as material costs coming down. Same with the health division. 15% of revs is imaging and respirtory. This equals about 375mill of sales a Quarter. The 7% decline hurts revs by 1% . Organic growth will overcome so Health earnings should be same despite margin decine to 22% from increased sales/marketing and R&D. Outlook for F/S is also for good revenue and profit year to year. Margins in F/S almost up to target of 12%. Safety products should rebound and although it is only 10% of sales the margin is 18%. Engineering should also be OK. Steel prices are up, spreads are down but this is only about 20-30mill deal. Flow which is 50% of business is going gangbusters and at 17% margins. So growth should overcome steel spread problem. Conclusion. Using about a 5-6% organic growth year to year and holding margins in the 14.2 to 14.5% range , tyco will do at least 46cents a share in Q1. Before earnings though we will get the prospectuses on the separate companies, the NeW York meeting and conference and the Roadshow will start. All in all a bullish scenario. Rich

To: JDN who wrote (3724)	2/7/2007 4:41:28 PM
From: rich evans	Read Replies (2) \| Respond to of 3770

Tyco reported results which were the same gross margin as last quarter of 33.6%. The problem is that Tyco's SGA expense was up 1% to 20.4%. This could be expected as it is Q1 when tyco gives its annual share based compensation awards which this year totaled 86mil. The problem is that guidance for Q2 for operating margin was way down to 12.5%-13%. This is lower then Q1 which was 13.1%. Operating margin for Q2 typically goes up as SGA expense is less. This means that gross margins are expected to decline in Q2- not good. I don't understand why? Electrical segment did not have it copper costs go down as expected as they are a first in - first out inventory cost accounting and therefore still had high priced copper to take out averaging 3.42/pound. This cost 15 mill on a year to year comparison with Q1/06. But copper is now 2.5/pound so eventually these better costs should help gross margins in electrical segment. Regardless, tyco is forecasting lower gross margins and operating margins of about 1% so what is up. Last year OM for Q2 for tyco was 13.7%. before special items. Don't understand the conservative guidance. And market is reacting to it negatively. Rich