NEW YORK (Bloomberg) Bermuda-based Tyco Electronics Ltd., the world's biggest maker of electric connectors, posted a loss of $1.37 billion in its first quarter as an independent company, mostly because of a settlement in a shareholder lawsuit.

The third-quarter net loss was $2.75 a share compared with net income of $298 million, or 60 cents, a year earlier, the Bermuda-based company said yesterday in a statement. Revenue rose 6.4 percent to $3.41 billion.

The company was spun off as part of the break-up of Tyco International Ltd., and had $891 million of costs from a shareholder lawsuit settlement by its former parent. Chief executive officer Thomas Lynch is selling lower-margin areas, including power systems. In the quarter, higher copper prices and sluggish US sales hurt profit at electronic components, its largest segment.

"We believe the company is going through a multi-year restructuring and product-pruning programme that will ultimately result in a more profitable company," wrote Thomas Dinges, an analyst at J.P. Morgan Securities Inc., in a July 2 note to investors. He put a "neutral" rating on the stock.

Shares of Tyco Electronics, with operating headquarters in Berwyn, Pennsylvania, fell 4 cents to $34.81 at 11:08 a.m. in New York Stock Exchange composite trading. The stock has declined 13 percent since it began trading July 2.

Excluding costs for the shareholder settlement, expenses for the split and planned restructuring, profit was unchanged at $461 million, the company said. It didn't provide a per-share figure for adjusted operating income. Three of the company's four main divisions reported increased sales and only one, the undersea fiber optic cable unit, posted higher profit. Sluggish orders from the North American automotive industry may be close to a "bottom," executives said on a conference call with analysts. Those sales affect the electronic-components unit, where profit fell 14 percent to $314 million.

In the quarter, Tyco Electronics spent $28 million to restructure and forecast spending as much as $50 million in the period ending in September.

Tyco International chief executive officer Ed Breen and his board decided to split Tyco into three to help improve returns from the conglomerate built by former CEO L. Dennis Kozlowski, now in New York State prison for stealing from the company. The other spin-off was health-care company Covidien Ltd.

Lynch is targeting a fourth-quarter sales increase of 5 percent to 8 percent and an operating margin excluding costs of as much as 13.5 percent. Costs for separation could be about $50 million, the company said.

Lynch in June told investors that the company is seeking annual profit margins of 15 percent and internal sales growth of 5 percent to 7 percent.

Tyco Electronics, which last month withdrew a $1.5 billion debt offering because of unfavorable conditions in the debt markets, still intends to carry total debt of about $3.5 billion.

The company's bridge loan expires in April 2008, giving it time to reconsider its approach, said chief financial officer Terrence Curtin on the call.