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April 25, 1994

UNISYS CONTINUES TO SHRINK AS SALES, GOVERNMENT SYSTEMS BUSINESS DECLINE

By CBR Staff Writer

The target of becoming a $20,000m-a-year company set by its creator Michael Blumenthal looks ever more remote for Unisys Corp, as worldwide sales declines and weak government demand in the first quarter cause it to confess that its goal for even slight revenue growth in 1994 is now a bigger challenge. Growth depends on improved sales in Europe and Japan in the second half of the year, the company said. It says it will continue to emphasise services, which is its most positive sector and grew 11% in the first quarter, but this was outstripped by declines in product sales and maintenance.. Unisys says that as it expected, worldwide orders declined in the quarter and government systems orders were down significantly. It said a decline in international commercial orders, exacerbated by currency-related losses, was offset by strong growth in the US commercial orders. Revenue and orders were expected to decline, said chief executive James Unruh, but they were weaker than anticipated, particularly in our European and Government Systems business units. Unisys promises to continue to reduce costs and emphasise services in response to the structural changes in the industry and market weakness. Earlier, Unisys had announced a tentative $111m partial settlement to litigation over retired employee health benefits, but said it would have no material impact on the company, noting that the settlement would be covered under an accrual taken earlier, when it adopted new accounting standards for post-retirement benefits.

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