Nabors In The Pink; Tyco In The Red

by Mike Godfrey, Tax-News.com, Washington

30 October 2002

As Nabors Industries Ltd, the global land-drilling contractor formerly incorporated in Houston, Texas announced that it has saved some $8.4 million by moving its headquarters to Bermuda, troubled Tyco International, also based on the Island revealed the extent to which its fortunes have changed over the past few months.

The Bermuda Sun reported last week that the company had announced that, partly as a result of the investigation surrounding several of its former top personnel, and partly due to uncertainty surrounding the conglomerate's accounting practices, Tyco has recently swung from being over a billion dollars in profit, to being over a billion dollars in the red.

However, the newspaper also suggested that the worst may now have passed, and that the prevailing view is that the manufacturing and service provision giant is now in more capable hands.

'You have the right people in there to turn the company around,' Banc of America analyst, Thomas Leritz told the Bermuda Sun, adding that: 'What is really driving the stock down is that no one believed the numbers to begin with.'

The audit of Tyco currently underway caused the company to restate its earnings for the previous three quarters, when reporting earnings for the quarter which ended September 30, due to aggressive accounting practices which had taken place at one of its units.

However, share prices were boosted last Thursday when the attorney conducting the accounting review, David Boies announced that profit forecasts are unlikely to be revised, and that he does not expect to uncover 'a very large fraud'.

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