For the three months to the end of December it made a net profit of $21.3m compared to a net loss of $31.1m in the year ago quarter. Its focus on restructuring during the year – which involved the elimination of 4,900 jobs – caused its revenue to fall slightly to $1.55bn from $1.57bn.
For the full year, revenue was flat at $5.76bn, generating a net loss of $278.7m compared to $1.73bn in 2005.
CEO Joseph McGrath accepted that the lack of guidance for 2007 was disappointing, and intimated that the company does not want to be distracted while still focussed on cutting costs.
It’s important to put pressure on ourselves to continue our costs reduction efforts, as we don’t believe we are at benchmark levels yet, he said. We did not want to create a plan that assumed we could grow our way out of non-benchmark cost infrastructure.
Top line growth seems to be less important, but he did tell analysts on a conference call that he expected the companies growth areas – outsourcing and infrastructure services – to grow at, but not above, industry growth rates, with its declining businesses to continue to track downwards which would give the company modest growth overall.
Unisys is aiming to reduce its headcount by around 700 in the first half of this year, as it moves to a global delivery model. Its offshore workforce in India, China and Hungary currently totals around 2,700, and it plans increase this to 6,000 by 2008, representing 20% of its total workforce.
On the conference call, McGrath was asked about a Computer Business Review report last month which quoted Unisys’ UK head Nick Wilson as saying that it was in the running for two mortgage processing BPO deals, worth over $500m each.
Unfortunately some of our leaders there got ahead of themselves in the comments you saw in that article, said McGrath, without commenting further on where Unisys stood in relation to the contracts, other than to confirm that it was looking to enter the mortgage processing area.
McGrath said he was ready for the first time to aggressively pursue BPO again, after learning the lessons of its disastrous UK deals in the banking and insurance sector, both of which he described as now being essentially breakeven.
