NEW YORK (Bloomberg) ? Bermuda-based Tyco International Ltd., the world?s biggest maker of electronic connectors, won?t make acquisitions in fiscal 2004 as the company focuses on reducing debt and costs and boosting sales, Chief Executive Officer Edward Breen said.

The company may make acquisitions in fiscal 2005, Breen said at an investors meeting to discuss Tyco?s electronics business. That unit, which contributed 28 percent of Tyco?s sales in its 2003 year ended in September, would be ?a beneficiary? of any decision to resume acquisitions, he said.

Breen spoke in New York at the first investor meeting planned for each of its five business segments. Executives are providing detail on Breen?s strategy of growing profit and sales with existing businesses rather than through acquisitions like his predecessor, Dennis Kozlowski.

?Our goal is to generate a lot of cash again this year and to pay down debt,? Breen said. ?There is no doubt that by 2005 we could be back where we want to and do selective acquisitions. I?m not going to put a size or scope in that comment.?

Breen was hired in 2002 to replace Kozlowski, now on trial for allegedly looting the company he built through $64 billion of acquisitions in his decade as CEO. Tyco today reiterated profit forecasts of 30 cents to 32 cents a share for its 2004 first quarter and $1.42 to $1.52 for the full year.

Shares of Tyco, run from West Windsor, New Jersey, rose 46 cents to $24.45 at 2:40 p.m. in New York Stock Exchange composite trading. They had climbed 40 percent this year.

Tyco is unlikely to increase its dividend or accelerate share buybacks until debt is further paid down and its ratings are a ?solid triple-B? rating from Moody?s Investors Service and Standard & Poor?s, Chief Financial Officer David FitzPatrick said in an interview with reporters.

Moody?s rates Tyco debt at Ba2, below investment grade, while S&P rates it BBB-, the lowest investment grade. The company paid down $1 billion in debt in its fourth quarter and had about $21 billion in total debt as of September 30.

Tyco in the year ended September 30 had $3.2 billion in ?free cash flow? or cash available after certain expenses. The company hopes to start using free cash in areas other than debt reduction in about 18 months, Breen said.

?We?re starting to have more flexibility with what we want to do with that cash,? Breen said. ?If we invest it right, we?re going to have more flexibility with things a lot sooner than people thought.?

The company last month said it was renegotiating $2.5 billion in bank lines and that it sold $1 billion in bonds as it refinances. Tyco should complete that renegotiation this month, FitzPatrick said.

Tyco?s sales of electronic components such as switches and relays will rise four percent to eight percent in fiscal 2004, helped by new products, Juergen Gromer, head of the company?s electronics unit, told investors today.

Components accounted for most of the $10.4 billion in sales at Tyco?s electronics unit in fiscal 2003. The rest came from undersea fiber-optic cable for telecommunications companies.

The unit is Tyco?s most economically sensitive as its customers, which include makers of computers and cars, are directly tied to consumers and manufacturers, analysts said.

Profit margins at Tyco Electronics hovered above 20 percent two years ago as the telecommunications industry boomed, and then fell to 14.7 percent last year amid waning demand. Margins will be as high as 16.3 percent in fiscal 2004 as Tyco expands outside the US and makes its factories more efficient, executives said.

The projections exclude the telecommunications unit, the world?s biggest maker of undersea fiber-optic cable, which had about $150 million in sales in fiscal 2003. Tyco has said it will sell the network portion of that business, known as Tycom.

Tyco Electronics spent about $435 million or 4.3 percent of sales on new-product development in 2003, $400 million on capital expenditures such as plant improvements, and $178 million on restructuring and other costs.

Prices for components used in computers, cell phones and automobiles fell 5.3 percent in fiscal 2003, more than the 4 percent to 5 percent expected, Gromer said.

The unit has cut costs by shutting more than 123 factories since 1999, reducing the total by 40 percent. It also is moving some production to China and Eastern Europe, and expects to save about $55 million next year from its Six Sigma efficiency program, Gromer said.

Tyco?s other business segments are fire and security, healthcare, engineered products and services, and plastics and adhesives. Its healthcare meeting will be January 20, executives said yesterday.