Services business boosts Unisys results

Increased margins from its services business led to a better-than-expected third quarter for Unisys.

But pricing pressures in the company's networking business and slower-than-expected growth of its Windows NT services business could slow revenue growth over the next two quarters, cautioned CEO Lawrence Weinbach in a prepared statement announcing the results.

The BlueBell, Pennsylvania-based company said on Thursday it posted profits of $US138 million on revenues of $1.9 billion for the quarter ended September 30.

This compares with earnings of $90 million on revenues of $1.8 billion during the same period last year.

Contributing to the profits were improved service margins, tight expense control and higher-than-expected shipments of the company's ClearPath servers, Weinbach said.

The company repurchased more than $141 million in debt during the third quarter and redeemed all its remaining preferred stock. Over the past two years, the company has reduced long-term debt by $1.3 billion and slashed more than $125 million in interest payments.

As part of its strategy to address the expected slowdown, Unisys will soon restructure its services organisation to focus on electronic-business opportunities -- especially outsourcing, networking and NT services. More details of the realignment will be announced next month, Weinbach said.