Tyco Int'l sees tough fiscal 2010, shares slip

By Scott Malone

BOSTON (Reuters) - Industrial conglomerate Tyco International Ltd (TYC.N) said it expects its revenue to continue to slide until late in its 2010 fiscal year, sending its shares down 3 percent on Tuesday.

The maker of security and fire-control systems expects demand to remain soft through the first half of its current fiscal year -- which began in late September -- and set revenue and profit targets that allowed for the possibility of declines.

"We have assumed that the current environment continues well into the year... with some modest -- and I emphasize modest -- pickup in the second half of the year," Chief Executive Ed Breen told investors on a conference call.

The company looks for sales to fall at a low-double-digit percentage rate through the first half of the fiscal year, with the rate of decline slowing in the third quarter and growth perhaps returning by the fourth quarter, Breen said. Recent cost-cutting measures could help boost Tyco's bottom-line performance when revenue starts to pick up, he added.

Analysts noted the company tends to be cautious in its forecasts -- pointing out that news came on a day that Tyco reported fourth fiscal quarter results that topped Wall Street's expectations.

"Their outlook is conservative," said Buckingham Research analyst Edward Wheeler. "They have been exceeding their expectations as they've gone along so I think it's all in line with the history of conservative guidance that they've had for the last year."

Tyco shares have risen some 64 percent so far this year, sharply outpacing the 7 percent rise of the Dow Jones U.S. diversified industrials index .DJUSID.

SETS 2010 OUTLOOK