Unisys today reported improved financial results in the second quarter of 2007 as the company continues to make progress in its multi-year repositioning programme.
Highlights of the quarter include:
* Strong double-digit growth in services orders;
* Significantly improved operating profit margins in both the services and technology businesses; and
* Strong improvement in operating cash flow.
As expected, the company took a net $24-million pre-tax restructuring charge in the quarter related to facility consolidations and workforce reductions. Including this charge and a $40,6-million tax expense, the company reported a second-quarter 2007 net loss of $65,5-million, or 19 cents per share.
These results compared with a second-quarter 2006 net loss of $194,6-million, or 57 cents per share, which included a net pre-tax restructuring charge of $141-million and a tax benefit of $8,9-million.
Pre-tax retirement-related expense in the second quarter of 2007 was $24,5-million compared with $45,2-million a year ago.
The company reported an operating profit of $2,5-million in the current quarter compared with a $183,7-million operating loss in the year-ago quarter.
Revenue for the second quarter of 2007 declined 2% to $1.38 billion from $1,41-billion in the year-ago quarter, principally driven by a decline in the company’s systems integration and consulting business. Foreign currency exchange rates had an approximately three percentage-point positive impact on revenue in the quarter.
President and CEO Joseph W. McGrath comments: “Our second-quarter results demonstrate continued steady progress toward our financial goals. Our operating profit improved significantly in the quarter. We saw particularly strong margin improvement in our services business. We continue to take actions to streamline our operations and drive toward our financial goal of an 8%-10% operating profit margin, excluding retirement-related expense, in 2008.
“As we focus on transforming our profitability, we also continue to build our sales pipeline and lay the foundation for future revenue growth,” McGrath adds. “Our services orders showed strong double-digit growth in the quarter, reflecting good client interest in our strategic growth programmes. The order growth was broad-based across most service lines and geographies. We were particularly encouraged by strong order growth in systems integration and consulting.”
The company signed some major contracts during the second quarter.
It also reported strong double-digit growth in its services orders in the second quarter. Order gains were broad-based with growth across all services segments with the exception of core maintenance, which is in secular decline. Unisys reported substantial order gains in systems integration and consulting.
Revenue in the US declined 7% in the quarter to $591-million while revenue in international markets increased 2% to $785-million.
The company’s gross profit margin and operating profit margin in the second quarter of 2007 improved to 21,8% and 0,2%, respectively, including the restructuring charge. These compared with gross and operating profit margins of 11,6% and (13,1%), respectively, in the second quarter of 2006, including the year-ago restructuring charge.