(Bloomberg) ? Tyco International Ltd., the world?s biggest maker of electronic connectors and security systems, said first-quarter profit declined 1.4 percent because of costs to repay debt and higher prices for raw materials.

Net income in the quarter ended on December 31 fell to $709 million, or 33 cents a share, from $719 million, or 34 cents, a year earlier, Bermuda-based Tyco said in a statement yesterday. Sales rose 4.1 percent to $10.1 billion.

Profit from electronics dropped and margins narrowed as metals prices rose. Chief Executive Officer Edward Breen said resin costs haven?t peaked yet this year and will continue to weigh on profit from plastics. Breen cut 8,100 jobs and sold 27 businesses last year to streamline the company, and is focusing on increasing sales and profit without large acquisitions.

?I?m a little disappointed with the revenue growth and margins in Electronics,? said Steve Hoedt, analyst in Cleveland at National City Corp., which has 1.59 million Tyco shares. ?Fire & Security margin improvement shows that the process improvements put in place by Ed Breen?s team are gaining traction. All in all, not a bad quarter, but not a great quarter.?

Excluding 7 cents of costs for divestitures and early debt payments, and a 2-cent loss from discontinued operations, profit matched the 42-cent average estimate of 16 analysts surveyed by Thomson Financial.

Shares of Tyco, whose brands include ADT and US Surgical, fell $1.45 to $34.69 at 12:54 p.m. in New York Stock Exchange composite trading. They had climbed 35 percent in the past year.

Tyco forecast second-quarter profit from continuing operations, excluding divestitures and debt-retirement costs, of 45 cents to 47 cents a share. Analysts polled by Thomson expected 47 cents. Breen reiterated the annual forecast of $1.88 to $1.98.

?Overall, we feel good about the economy and our global businesses,? Breen said on a conference call. Net debt, or total debt minus cash and cash equivalents, fell 1.4 percent to $12.1 billion in the quarter. Breen, 48, said his goal is still to trim net debt to as low as $10 billion.

?Rapid debt reduction remains a key feature of the story,? Citigroup analyst Jeffrey Sprague wrote in a note. ?Tyco is generating significant free cash flow and has the ability to rapidly deleverage.? He has a ?buy? rating.

Revenue at electronics, which includes the AMP brand, rose 1 percent to $2.88 billion in the quarter as profit fell 2 percent. Margins shrank to 14.4 percent from 14.9 percent as the price of steel sheet, the industry benchmark, more than doubled.

?Given the strength that we have seen from some of the technology companies this quarter that feed into the same supply chains, I thought that there might be room for a small upside surprise? at electronics, Hoedt said.