(By Balaseshan) ADT Corp. (NYSE: ADT), a provider of electronic security services,reported a 12.9 percent increase in quarterly profit, helped by growth in recurring revenue. Despite revenue missing consensus, earnings exceeded Street's expectations.
Earnings per share (EPS) before special items increased 7.3 percent to 44 cents, beating market expectations by a penny. EPS before special items at cash tax rates rose to $0.70 from $0.67. Net income grew 12.9 percent to $105 million for the quarter.
Revenue rose 1.8 percent to $809 million, while consensus estimates $817.83 million for the fourth quarter.
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Recurring revenue, which generated over 92 percent of total revenue in the quarter, grew 5.1 percent, driven by 4.7 percent growth in average revenue per customer and 0.5 percent rise in customer accounts, the company noted.
ADT said it added 257,000 new customers and closed the quarter with 6.43 million customer accounts, 0.5 percent higher than last year.
Under its $2 billion authorization, the company repurchased 567,000 of its shares during the quarter for $26 million, and in January it repurchased an additional 1.6 million shares for $74 million.
The company said it has entered into an accelerated share repurchase agreement with Credit Suisse International, under which it will repurchase about $600 million of its common stock. ADT will buy the shares under its previous share repurchase program and will fund the repurchase using proceeds from its recently concluded debt offering.
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ADT will pay Credit Suisse $600 million on February 4 and on that date will receive initial deliveries of about 10 million shares, representing a substantial majority of the shares expected to be retired over the course of the agreement. The accelerated share repurchase is expected to be completed by July 26, although the completion date may be accelerated at Credit Suisse's option after an initial fixed period.
Looking ahead for the fiscal 2013, the Boca Raton, Florida-based company still expects recurring revenue growth of 4.9 percent to 5.2 percent from $2.9 billion in 2012.
ADT shares ended Tuesday's regular session down 0.98 percent at $46.51. The stock has been trading in the 52-week range between $34.68 and $48.91.