Commenting on its 67% plunge in second quarter profits to $53.6m (see page five), Unisys Corp chairman and chief executive Michael Blumenthal said that operations in the second quarter were profitable but, as we expected, margins were depressed by a vigorous inventory reduction program and the associated higher than planned manufacturing costs; operations were also hit by competitive pricing pressures in the mainframe business and temporary suspension of the defence business, which saw orders plunge 50%, bringing overall orders down to below the level of last year – and slower-than-planned demand for commercial computers, plus the inventory reduction programme, leave the company with under-loaded plants; that puts up manufacturing costs, so that the prospects for the rest of the year are much duller than the company had forecast; on the inventory reduction programme, another $231m of the company’s computer mountain was chipped away so that it is down by $371m from its peak in the third quarter of 1988.
