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Thursday, 24 October, 2002, 13:10 GMT 14:10 UK
Telecoms write-off hits Tyco profits
Tyco logo
Tyco International, the hard-pressed conglomerate whose former chief executive and finance boss are facing charges of stealing $600m from the company, has posted its third straight quarterly loss.

Much of the $1.75bn net loss for the July to September period came from the company's admission that undersea fibre optic cable network was valued at $2.2bn less than it had been during the tech boom.

The loss compared with a net profit of $1.37bn for the same period a year before.

Excluding the one-off charge the company managed a slim 30 cent a share profit for the latest quarter, a figure albeit lower than expected by Wall Street analysts.

And, with sales at continuing operations rising by a better-than-expected 10%, Tyco said that the worst was behind it.

But the Wall Street Journal warned that past performance could yet come back to haunt Tyco, reporting that the firm's losses registered in the first three quarters of 2002 could yet prove even worse than has been revealed

The paper alleged that "questionable accounting practices" in alarm subsidiary ADT meant Tyco's reported $7.29bn loss for the nine months to June could still expand further.

Bad patch

Tyco has been hit with a welter of bad news over recent months.

former chief executive Dennis Kozlowski is facing charges of defrauding the taxman over art purchases.

With finance chief, Mark Swartz, he also faces charges that he stole $170m from the company, and making an further $430m through fraudulent securities sales.

The company's own performance has been disappointing, too, as the mass of acquisitions that drove its wildfire growth through the 1990s - taking it into business ranging from electronics to nappies - have proved difficult to integrate.

And its decision to relocate its official address to Bermuda - a common tactic among large US corporations, ostensibly to avoid onerous taxes - has also begun to look less astute.

Although legislation designed to punish companies performing this kind of offshore shift failed to make it through the last Congress, it is likely to be re-considered once the new session begins in January.


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