Tyco Electronics (TEL) Announces Restructuring in Europe; Sees $155 Million in Charges

September 4, 2008 12:41 PM EDT

Tyco Electronics Ltd. (NYSE: TEL) intents to initiate a restructuring to consolidate production of its automotive products in key manufacturing sites throughout Eastern and Western Europe. The proposed changes, which are subject to consultation with several local works councils and the European Works Council, would involve three automotive plant closures and restructuring of operations at several facilities in Spain and France, and would impact approximately 850 employees.

According to Tyco Electronics Chief Executive Officer (CEO) Tom Lynch, "These actions are the next steps of the broader strategic initiative announced last year to streamline our operations and improve our productivity in all areas of our business."

Based on current foreign exchange rates, the company estimates that charges associated with the European automotive restructuring plan will be approximately $155 million, with an expected completion target within 15 months. In the fiscal fourth quarter, the company now expects restructuring- related costs of approximately $135 million, or $0.27 per share. This compares to prior guidance of $67 million, or $0.09 per share for the quarter.

As a result, the company now expects GAAP diluted EPS from continuing operations of $0.38 to $0.40 for the quarter. On an adjusted basis, the company continues to expect EPS from continuing operations of $0.65 to $0.67 for the quarter. (Consensus is $0.67)

Tyco Electronics Limited is a global provider of engineered electronic components, network solutions, wireless systems and undersea telecommunication systems.[SM]

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