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April 14, 2005

Unisys reports another tough quarter

IT services and hardware vendor Unisys suffered another "tough quarter" in the three months ending March 31, 2005, according to the company's president and CEO Joe McGrath.

By CBR Staff Writer

Revenue fell and the company posted a second consecutive quarterly loss, which McGrath blamed on continuing challenges of several transformational outsourcing contracts and a substantial increase in pension expense.

Blue Bell, Pennsylvania-based Unisys reported a net loss of $45.5m in the first quarter of 2005, compared to a net gain of $28.9m in the year-ago period. Total sales declined 6.6% to $1.37bn, with services revenue down 4.9% at $1.1bn and product sales dropping 13% to $259m.

Overall orders were flat in the quarter, with services orders showing single-digit gains, and product orders showing double-digit declines. Sales of the company’s ClearPath enterprise servers fell by mid-single-digit percentage.

McGrath said he was encouraged by the company capturing $400m in outsourcing and managed services deals during the quarter, including a $143m desktop services deal with New York City Transit, and a $90m business process outsourcing contract with UK insurance company Resolution Life Group.

Looking ahead to the second quarter, McGrath said he expects it to be challenging with revenue flat on the year-ago period, and the company breaking even excluding the impact of pension expenses.

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