Tyco International Ltd. (TYC), the global manufacturer of various industrial products, has surprised on estimates the last four quarters by an average of 26.56%. It is expected to report third quarter results next week.

Company Description

Tyco International manufactures industrial products for customers in more than 60 countries through 5 business segments: ADT Worldwide, Fire Protection Services, Safety Products, Flow Control, and Electrical & Metal Products.

The company’s products include electronic security and alarm monitoring, fire-fighting equipment and breathing apparatus, water purification, valves and controls, and armored wire and cable, among other items.

Tyco Readies Third Quarter Results

On July 30, Tyco is scheduled to report its third-quarter 2009 earnings. Third quarter consensus has fallen 2 cents to 45 cents in the last 60 days but 1 out of 13 covering analysts has raised in the last month.

2009 consensus estimates are holding at $2.16 per share over the last 60 days with 1 out of 13 covering analysts raising in the last 30 days.

Will Tyco Continue to Surprise?

Tyco has a history of surprising on estimates having beaten for the last 12 quarters.

On Apr 30, the company reported second quarter results that surprised by 34.15%, or 14 cents per share. Adjusted earnings per share were 55 cents compared to analysts’ estimates of 41 cents per share.

Reflecting the tough economic conditions, revenue fell 15% to $4.2 billion primarily due to the stronger U.S. dollar. Organic revenue fell 5.5%.

All 5 of its business segments saw a decline in revenue in the quarter with Flow Control seeing the smallest decline of 9%.

Electrical and Metal Products took the biggest hit with a fall of 39% mainly due to weak demand in end markets, especially steel and copper products. Volume for steel products fell 49% while copper volumes slid 11%.

Value Fundamentals

Tyco International is a Zacks #1 Rank (strong buy) stock. It has attractive value characteristics with a forward P/E of 13.45 and a price-to-book of 1.16. The company has a solid 5-year average return on equity (ROE) of 10.69%.

As an added bonus, Tyco pays a dividend with a current yield of 2.80%.

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