WASHINGTON (04/13/2000) - Unisys Corp. today reported a net profit of US$106.5 million for the first quarter, but said a slow rebound in sales after the year 2000 date changeover and implementation of a new organizational model caused revenue to decline 8 percent, compared with the same quarter last year.
Unisys' net profit for the quarter that ended March 31 equaled 34 cents per diluted common share, in line with the consensus forecast made by analysts polled by First Call/Thomson Financial. It compared with first quarter 1999 net income of $109.9 million, or 31 cents per diluted common share, the company said in a written statement.
Revenue in the quarter was $1.67 billion, down from $1.82 billion in the same period last year. Unisys said the strength of the dollar also contributed to its revenue decline.
Unisys announced last week that its new financial year got off to a slower-than-expected start due to the year 2000 transition and the impact of organizational changes. The Blue Bell, Pennsylvania-based company, however, was able to increase earnings per share through tight cost controls, reduced interest expenses and the elimination of preferred stock dividends, the release said.
Sales data show that customers have begun turning their attention to significant new IT projects, particularly in the area of electronic business, and server sales also picked up late in the quarter, Chairman and Chief Executive Officer Lawrence Weinbach is quoted in the release as saying. Unisys began shipments of its new ES7000 servers based on CMP (cellular multiprocessing) architecture at the end of March.
The company also saw an increase in proposed integration and outsourcing contracts in the first quarter over a year ago.
Just before the quarter closed, Unisys saw its share price shoot up, [See "Unisys Shares up on Deutsche Telekom Rumors," March 27] apparently because of rumors that Unisys was in talks with German telecommunications company Deutsche Telekom AG. Deutsche Telekom was said to be interested in buying Unisys, whose shares were up just slightly on the New York Stock Exchange today.
Unisys, in Blue Bell, Pennsylvania, can be reached at +1-215-986-4011, or via the Web at http://www.unisys.com/.