Unisys meets expectations; will trim work force
By Margaret Kane ZDII
Unisys Corp. (Nasdaq: UIS) matched analysts' estimates for the third quarter, but said it would offer early retirement tot 1,500 workers in a move to trim costs.
The company posted net income of $42.9 million, or 14 cents per diluted share, in line with First Call consensus. Revenues for the quarter were $1.7 billion, a 9 percent drop from the year-ago quarter. Net income a year ago was $138.4 million, or 43 cents per diluted share.
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The services firm said it would offer early retirement packages to 1,500 workers, and would take a related $200 million charge in the fourth quarter. It has 36,000 employees world-wide.
"This was a transitional quarter as we continued to evolve our portfolio and skills mix to meet the new requirements of the e-business market," CEO Lawrence A. Weinbach said in a release. Weinbach said services revenue, primarily in systems integration and repeatable solutions, was slow, reflecting slow order activity in the first half of the year.
And strong growth in the new ES7000 server line was offset by seasonally lower sales of ClearPath systems.
Currency factors also hurt the company, Weinbach said.
As part of an effort to "re-focus" the business, Unisys will cut back on the number of solution packages offered, and focus its networking business on higher value services such as managed network outsourcing services, network consulting, and an expanded network security management practice.
Unisys had issued a warning in the second quarter, citing deferred contracts and a weak federal government business. |
