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July 16, 1998

UNISYS SEES BENEFITS OF COST REDUCTION WITH STRONG Q2

By CBR Staff Writer

Unisys Corp more than doubled its net income year-over-year and edged out Wall Street expectations with its second-quarter results. The Blue Bell, Pennsylvania company posted net income that soared 115% to $90.1m on revenue that rose 9.0% to $1.73bn. Earnings per share for the quarter were $0.24, ahead of First Call’s consensus of $0.21. The company says its recent actions to focus on higher-growth services markets is paying off as well as the program to reduce expenses by $200m over the next several years. Unisys has also seen the favorable effects of its continuing program to reduce debt. It announced Thursday that it will make a further $160m in debt repayments, which will allow it to reach its stated $1bn debt reduction goal by October, about a year ahead of schedule. Cash flow has also continued to strengthen, with an improvement of more than $400m over the first half of last year. Cash levels increased $57m during the quarter to $712m. The information services business saw revenue growth of 29%, while customer services saw 7% growth and computer systems revenue slipped 7%. Overall operating margins for the quarter increased 2.6 points to 10.7%. Six-month net income rose 149.7% to $152.8m on revenue up 8.4% at $3.38bn. Earnings per share rose to $0.38 from $0.02 for the six months. While the company gave no guidance for next quarter, analysts surveyed by First Call are expecting $0.23 per share.

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