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Friday, July 31, 2009

Slimming down Tyco Electronics

Tyco Electronics Ltd. is domiciled in Switzerland, run from offices in Berwyn, and created in part from engineering talent that built central Pennsylvania’s AMP Inc.

And yes, it carries that name Tyco.

Many people are reminded of Tyco Electronics’ former parent, Tyco International Ltd., or rather the now-jailed L. Dennis Kozlowski, who ran the conglomerate.

Today’s Tyco Electronics supplies all sorts of electronic components to the auto industry. The company endured a nearly 50 percent drop in demand as carmakers rapidly downshifted. Chief executive officer Thomas Lynch is cautiously optimistic that the inventory destocking that all auto suppliers were hampered by is now ending. The firm’s electronic-components segment is expected to return to profitability in its fourth quarter, which ends Sept. 30.

For its third quarter, Tyco Electronics lost $74 million, or 16 cents a share, on net sales of $2.51 billion. A year earlier, it had net income of $330 million, or 68 cents a share, on net sales of $3.78 billion.

In a recession, there are things management can control and others it cannot. Lynch said that while the firm was spun off two years ago, it needed to reduce duplication. At its peak, Tyco Electronics was running 200 factories worldwide — about 100 too many. So it has been consolidating, closing, and laying off workers. The number of plants has been winnowed to 135; Lynch would like to get to 100 factories.

“The end is in sight,” he said.

Tyco Electronics’ shares closed at $21.47, down 13 cents on Friday.

Another goodbye

Another former Tyco International company is buying the publicly held Power Medical Interventions Inc., of Langhorne.

The medical-device-maker agreed to be acquired by Covidien Inc., a health-care-products firm spun off by Tyco two years ago.

Covidien is paying $2.08 a share in cash. Including the assumption of debt, the total value of the transaction is about $64 million.

Power Medical makes products that make me wince just saying them: computer-assisted, power-actuated surgical cutting and stapling products.
Posted by Mike Armstrong @ 5:44 PM  Permalink | File Under: Technology | 1 comment
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About Mike Armstrong
Mike Armstrong, a business editor and writer for nearly two decades, is the Inquirer's business columnist and PhillyInc blog editor. Contact Mike via e-mail or at 215-854-2980
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