ADT / Tyco Security Q3 2009 Financial Performance

Published Nov 25, 2009 00:00 AM
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Tyco International's fiscal Q4 2009 (calender Q3) financial results show continued financial weakness in their system integration and security product business. 

  • ADT Worldwide revenue fell 9% year over year dropping from $1.98 Billion to $1.79 Billion. Recurring revenue grew 4% but Systems installation and service revenue declined 14% (see page 5 of Tyco's 4th Quarter review)
  • Electronic security product sales declined 21% year over year (specific dollar revenue was not disclosed). See page 9 of Tyco's 4th Quarter review. Compare this to the fiscal Q3 2009 where electronic security product sales only declined 12% year over year.
Additionally, management's Q4 conference call revealed a number of interesting details:
  • ADT is prioritizing international expansion. They report operating in 40 emerging markets accounting for 15% of total revenues. They emphasize that R&D centers in Shanghai and Bangalore are focusing on products optimized for the needs and costs in local markets.
  • ADT doubled its number of offices for Fire and Security in China. They expect to do so again next year. Note: they did not disclose the total number of offices.
  • They commented on the interactive security services: "I would think we do launch in 2010. I won’t say it’ll be a full bore roll out across all regions but I would expect we will be out of Beta test and into some type of a roll out and clearly that would be in the second half of the fiscal year. I won’t get into all the details but we are still feeling positive about it, the technology is working nice." This may refer to their partnership and testing with iControl [link no longer available].
  • ADT is adding accounts on the residential side but losing on the commercial side. They note that commercial ARPU is $80-$90 per month while residential is $35-$40.