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Tyco Reports a Loss of $2.32 Billion for Quarter

July 24, 2002|From Reuters

Tyco International Ltd. on Tuesday posted a $2.32-billion quarterly loss, mostly because of the recent sale of CIT Group Inc. but also because of the telecom bust and lower margins in its plastics, electronics and security businesses.

The sharp drop in cash flow came as the conglomerate works to reduce debt and restore investor confidence after the abrupt resignation of its longtime chairman.

Tyco shares, which fell about 10% on Tuesday, have been hammered by an about-face in corporate strategy and questions about its accounting.

Interim CEO John Fort said Tyco would not certify its past results until after an internal investigation into its finances is completed next month. Because it is based in Bermuda, it is not subject to a new requirement that executives certify their results by Aug. 14.

Tyco's cash flow tumbled to $657 million in its fiscal third quarter ended June 30, far below the company's original estimate of $900 million to $1.1 billion, largely from stricter payment terms as suppliers fear a cash crunch.

Tyco reported a net loss of $1.16 a share for the quarter, including a $2.23-billion charge for the CIT sale, contrasted with year-earlier net income of $1.17 billion, or 65 cents a share. Excluding charges and special items, Tyco said it earned 45 cents a share, compared with 73 cents a year earlier, in line with analysts' expectations.

Tyco's revenue from continuing operations rose to $9.12 billion from $8.68 billion.

Tyco shares fell $1.20 to $10.65 on the New York Stock Exchange.

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