Citing the weakened economy, old-line computer makers Unisys Corp. and NCR Corp. reported lower earnings for the second quarter, and Unisys issued a profit warning for the third quarter as well.
Yesterday, Blue Bell, Pa.-based Unisys said it earned US$29.3 million, or 9 cents a share, excluding a $17.2 million charge, compared with the $59.4 million, or 19 cents a share, the company earned in the same quarter a year ago, excluding a $19.8 million charge for the early retirement of debt.
Analysts surveyed by Boston-based First Call/Thomson Financial had predicted the company would earn from 8 to 10 cents per share.
Revenue for the quarter ended June 30 was up 3 percent to $1.46 billion from $1.42 billion in the same quarter last year.
"We continue to manage our business profitably in a very challenging economic environment," said Unisys Chairman and CEO Lawrence A. Weinbach in a statement. "As customers delayed planned IT projects and reduced expenses during this period, we saw weak demand in our high-end enterprise server and systems integration businesses. On the positive side, we saw continued revenue growth in our network services and outsourcing businesses. Geographically, we saw order weakness particularly in our international business as economic uncertainties spread globally."
Weinbach also said the company expects third-quarter earnings to be weak but is looking forward to a rebound in the fourth quarter.
"Based on [the weak international economy], we look for our earnings per share in the third quarter to be in the range of 5 to 10 cents," he said. "We continue to look for our results to strengthen in the fourth quarter as we make volume shipments of our new high-end ClearPath servers, as ES7000 server shipments build and as our recent large outsourcing contracts continue to ramp up. Our preliminary estimate is for fourth-quarter 2001 earnings per share of approximately 25 to 30 cents."
NCR in Dayton, Ohio, also posted lower-than-expected second-quarter earnings. Today, the company said net income was $35 million, or 35 cents a share, compared with $39 million, or 39 cents a share in the second quarter last year. After an earnings warning by the company earlier this month, analysts surveyed by First Call/Thomson Financial had estimated earnings of 36 cents per share.
Second quarter revenue was $1.5 billion, up from $1.45 billion a year ago.