Confounding the sceptics – which included most analysts, Unisys Corp will make a modest profit for the quarter to the end of this month, chairman and chief executive officer James Unruh told the New York Society of Security Analysts. Unisys returned to profitability in the fourth quarter of 1991 and said in January that it expected to be profitable for full year 1992, but did not comment on the first quarter. But Unruh said We expect a small profit in the seasonally weak first quarter compared to a loss of $98m or 79 cents a share in the first quarter last year. Clearly, we consider a first quarter profit another significant milestone in our recovery. Given the environment, a profit was not a sure thing. We remain very cautious about global economic conditions, particularly in the first half… We anticipate a positive impact from volume shipments of new large-scale computers as the year progresses. Unruh said that Unisys is succeeding in its tough strategy to create a cost structure that would sustain profitability even in a weak business environment while building the foundation for growth as the economy improves.

New strategic workstations

Outlining the company’s strategy, Unruh said that Unisys will continue to fund and deliver new strategic workstations, client server systems and mainframes that support the company’s open Integrated Information Environment. It will aim to meet the needs of the total customer base through both Unisys-only initiatives and increasing partnerships with industry leaders such as KPMG Peat Marwick and Cooper Lybrand Deloitte in applications and consulting and Intel Corp and Motorola in chip technology. Unisys hopes to increase market share on a global basis over time in financial institutions, airlines, communications carriers, and government agencies worldwide these account for more than 70% of current commercial business. It hopes to build off the systems integration and services expertise in the government market to revamp and grow its professional services business – education, systems integration, consulting, facilities management – in the commercial market. It also aims to continue to accelerate the improvement of customer satisfaction levels around the world, which include a second consecutive number one rating in Japan, through expansion of the Unisys Total Quality Process. Unisys will continue to bring down debt and generate cash through aggressive asset management in 1992, Unruh said. In 1991, inventories and receivables both declined 30% to their lowest levels since 1986. It expects to generate more than $700m in cash flow from operations in 1992 as it returns to profits by squeezing additional cash out of inventories and receivables. It does not expect to see additional finance in 1992. We believe we were early among our computer systems competitors to reshape our business to the new realities of our industry: there is no easy or rapid way to solve today’s challenges. But we have indeed made a new start and will begin in 1992 to reap the benefits of the tough decisions made and the dedication of our employees, Unruh concluded.In Japan, affiliate Nippon Unisys Ltd plans to double sales in its software and service division over the next three years, to $1,170m in 1994. Unix sales are expected to rise 400% to $1,000m.