Tyco Tops Views, Says Johnson Controls Merger Will Close Ahead of Schedule
29 July 2016 - 11:00PM
Dow Jones News
Tyco International PLC on Friday reported better-than-expected
results in the most recent quarter and said its tie-up with Johnson
Controls Inc. is set to close earlier than previously
anticipated.
"We have continued to make great progress with integration
planning for our merger with Johnson Controls. We are now in
position to close the merger a month ahead of schedule," said Chief
Executive George Oliver. He also reaffirmed that Tyco remains
confident the deal will result in $1 billion in cost savings.
The companies agreed in January to merge in a $14 billion deal
that creates a new giant provider of commercial-building systems
and reflects a growing push by some executives and shareholders
toward companies that are bigger but more focused. The deal will
combine Johnson Controls' business selling heating and
air-conditioning equipment for skyscrapers, schools, hospitals and
other structures with Tyco's lines of security and fire-suppression
gear into a company with more than $30 billion a year in sales.
The new company will be renamed Johnson Controls PLC but will
maintain Tyco's Irish legal domicile—a so-called inversion deal
that brings shareholders tax benefits but has stirred
controversy.
Tyco, a fire-protection and security systems company, moved its
headquarters late last year to Cork, Ireland, from Switzerland, and
does more than half its business outside of the U.S. The stronger
U.S. dollar makes its products more expensive abroad.
In all for the June quarter, Tyco posted a profit of $239
million, or 56 cents a share, up from $156 million, or 37 cents a
share, a year earlier. On an adjusted basis, earnings from
continuing operations rose to 54 cents from 46 cents.
Revenue slipped 1.6% to $2.45 billion, as 1.5% organic growth
was more than offset by a 3% negative impact from the stronger U.S.
dollar against foreign currencies. Tyco said a three percentage
point benefit related to acquisitions was fully offset by a 3
percentage-point impact related to divestitures.
Analysts polled by Thomson Reuters were looking for adjusted
earnings of 53 cents a share on $2.44 billion in revenue.
Tyco shares, inactive premarket, have risen 18% over the past
three months.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
July 29, 2016 08:45 ET (12:45 GMT)
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