Tyco Announces Full Year Guidance For 2011

Citigroup has published a research report on Tyco Electronics TEL after the company reported a solid 1Q11 beat and raised full year guidance. In the report, Citigroup writes "Tyco reported 1Q'11 (Dec) revenue of $3.2 billion, above guidance of $3.05-$3.15billion & above consensus of $3.16 billion & CIRA at $3.17billion. The company reported adjusted EPS of $0.73 also above guidance of $0.66-$0.70 & above consensus expectations of $0.68 & CIRA of $0.67. The biggest upside was automotive. Operating margins (excluding restructuring) improved to14.5% from 14.2% in September & 11.5% a year ago. Book-to-bill was 0.99 in the quarter, & excluding subsea, was 1.03 compared to 0.95/0.99 in Sept. TEL guided sales for the March quarter to be $3.45-$3.55 billion (up 7.8%-10.9% q/q) with mid point of $3.5 billion slightly above consensus expectations of $3.48 billion (inline with CIRA at $3.5 billion) & adjusted EPS of $0.70-$0.74 vs. the street at $0.68 (CIRA at $0.76). TEL is increasing its full fiscal year (Sept) outlook for sales of $13.9-14.3b & adjusted EPS to $3.05-3.20 (consensus at $14b/$3.07) from $12.8-13.2 billion / $2.85-3.05 to include $1 billion sales & $0.12 EPS from the ADCT acquisition integration & we note the EPS increase is $0.03-0.08 from non acquisition integration & matches the amount of today's better results." Citigroup maintains its $46 price target on Tyco Electronics, which closed yesterday at $36.03.