Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Kenya AA who wrote (58049)	4/15/1999 1:24:00 PM
From: Elwood P. Dowd	Respond to of 97611

Unisys Profits Fueled By Year 2000 Surge By Eric Auchard BLUE BELL, Pa. (Reuters) - Unisys Corp. (NYSE:UIS - news) reported a 77 percent jump in first-quarter profits, far ahead of Wall Street expectations, propelled by an unexpected surge in sales of its powerful business computers in advance of looming Year 2000 deadlines. Net income after taxes rose to $111.2 million, or 32 cents per share after accounting for dilution from stock options and preferred dividends, from the $62.7 million, or 14 cents per diluted share, in the first quarter of 1998. The profit of 32 cents per share was 33 percent above the consensus estimate of 24 cents financial analysts had expected the Blue Bell, Pa.-based company to report, according to a First Call Inc. survey of brokerage projections. Revenues grew 10 percent overall to $1.81 billion in the first quarter from $1.65 billion in the same quarter a year ago. Computer consulting and technical services revenues grew 13 percent to $1.2 billion, while technology sales, including its mainframe-class computers, rose 4 percent to $620 million. Unisys said the results showed it was benefiting from an unusually strong first half of 1999, offsetting potential slowness in the second half, when customer buying of new corporate computers is expected to slow to allow time to fix potential Year 2000 glitches in existing computer systems. ''This was truly an outstanding quarter for us,'' Chairman and Chief Executive Larry Weinbach said after the results were released in an investor conference call broadcast over the Internet. ''We are clearly off to a strong start for 1999.'' ''We feel confident in our outlook for the rest of 1999 and beyond,'' Weinbach said, although he noted the company remained cautious about technology spending in the second half of 1999 due to what it believes is accelerated spending in the first half. But the top Unisys executive stressed that due to the anticipated shift in customer spending tied to Year 2000 repair work, the company expected a higher percentage of the year's earnings in the first half of 1999 than in previous years. Specifically, he said sales of ClearPath business computers would decline in the second half of 1999. On the other hand, the two-thirds of Unisys business that comes from supplying computer services remain strong. ''Orders for our services were up substantially in the quarter, adding to a steadily growing backlog,'' Weinbach said. Overall, Weinbach reiterated the company's previously stated game-plan for 1999. ''We still believe we're going to report growth of 8 to 10 percent this year,'' he said. The latest quarter's double-digit revenue growth also reflected the turnaround that has taken hold at Unisys since Weinbach took over in 1997 and began a restructuring campaign that included cost-cutting to lighten its debt load. By comparison, revenue growth averaged 2 percent in the five years up to 1997 and a string of losses that stemmed from the staggering debt payments left over from the 1986 merger of mainframe computer makers Burroughs and Sperry to form Unisys. Globally, Unisys reported substantial revenue growth in the United States and modest growth in international markets during the first quarter. It said currency translation issues in Brazil did not hurt overall operations, as it first feared in the wake of the devaluation of the Brazilian real in January. Declines in Latin America were more than offset by revenue gains in Europe and the Asia-Pacific region, excluding Japan. Japan revenue declined in the quarter due to ongoing weak business conditions in that region but the decline was less than the company had planned, it said. The combination of higher than expected ClearPath computer sales and continued cost reductions allowed Unisys reach a record operating profit margin of 14 percent -- the highest level in many years, the company said. Unisys also made further progress in restructuring its finances. During the quarter, it eliminated 8.2 million shares of preferred stock, reducing these shares by about 30 percent and preferred dividend payments by more than $30 million a year, which boosts earnings available to common shareholders. Unisys stock rose $1.25 to $30.56 in late-morning composite trading on U.S. stock exchanges. Earlier Stories Unisys Profit Tops Wall Street Consensus (April 15) Unisys Profit Tops Wall St. Consensus (April 15)