Advanced Computing in the Age of AI | Friday, March 29, 2024

Unisys Announces First Quarter 2015 Financial Results 

Unisys Corporation today reported a first-quarter 2015 net loss of $43.2 million, or 87 cents per diluted share, which included $27.4 million of pension expense. In the first quarter of 2014, the company reported a net loss of $53.5 million, or $1.15 per diluted share, which included $19.3 million of pension expense. Excluding pension expense in both periods, the non-GAAP diluted loss per share in the first quarter of 2015 was 32 cents compared to 74 cents in the first quarter of 2014.

First-quarter 2015 revenue declined 5 percent to $721 million from $762 million in the year-ago quarter. First-quarter 2015 revenue grew 1 percent on a constant currency basis.

"We were pleased to see revenue growth of 1 percent on a constant currency basis during the first quarter of 2015 and 13 percent growth in our U.S. Federal government business," said Unisys President and CEO Peter Altabef. "While our technology margins increased, our service margins declined. We are taking actions to streamline our business by enhancing our competitiveness and accelerating the pace of innovation. Our focus is on making Unisys an agile leader that can anticipate and rapidly respond to market opportunities globally."

In connection with organizational initiatives designed to create a more competitive cost structure and rebalance the company's global skill set to take advantage of growth opportunities, Unisys expects to recognize a pretax restructuring charge currently estimated at approximately $300 million over the next several quarters.  The company expects to reduce worldwide headcount by approximately 8 percent.  As a result of these actions, the company expects to generate annualized savings of approximately $200 million by the end of 2016.

First-Quarter Company and Business Segment Highlights

U.S. and Canada revenue rose 9 percent in the quarter. Revenue from the rest of the world declined 16 percent. On a constant currency basis, international revenue declined 5 percent.

U.S. Federal government revenue in the first quarter of 2015 grew 13 percent versus the year-ago quarter. Public Sector revenue, which includes U.S. state and local and international governments, declined 10 percent. Financial industry revenue also declined by 10 percent.  Revenue from Commercial industry clients declined 7 percent.

First-quarter 2015 services revenue declined 6 percent from the prior-year quarter. On a constant currency basis, services revenue was flat. First-quarter 2015 services gross profit margin decreased to 14.1 percent from 15.8 percent a year ago while services operating profit (loss) margin declined to (1.3) percent from 1.5 percent a year ago.

First-quarter 2015 services orders increased from year-ago levels primarily driven by higher orders for Cloud and Infrastructure Services. Services backlog at March 31, 2015 was $4.5 billion compared to $4.8 billion at December 31, 2014.  Services backlog at March 31, 2015 was flat compared to March 31, 2014 and up on a constant currency basis.

First-quarter 2015 technology revenue rose 3 percent from the prior-year quarter driven by higher sales of our enterprise software and servers. On a constant currency basis, technology revenue increased by 13 percent. Reflecting the higher enterprise software and server sales, first-quarter 2015 technology gross profit margin rose to 49.6 percent from 41.3 percent in the year-ago quarter and technology operating profit (loss) margin increased to 5.2 percent from (16.4) percent in the year-ago quarter.

The company reported an overall first-quarter 2015 gross profit margin of 16.2 percent compared with 17.5 percent in the year-ago quarter. Operating expenses (SG&A and R&D expenses) declined 4 percent from the year-ago period. The company reported a first-quarter 2015 operating loss of $30.0 million compared with an operating loss of $19.9 million in the first quarter of 2014. Pension expense was $8.4 million higher in the first quarter of 2015.

The company reported a first-quarter 2015 pretax loss of $27.7 million compared with a pretax loss of $31.7 million in the year-ago quarter. Excluding pension expense in both periods, the company reported a non-GAAP pretax profit of $0.2 million in the first quarter of 2015 compared with a non-GAAP pretax loss of $12.2 million in the first quarter of 2014.

Cash Flow and Balance Sheet Highlights

Unisys used $43 million of cash from operations in the first quarter of 2015 compared to $20 million in cash from operations generated in the first quarter of 2014. Cash from operations included pension contributions of $39 million in the first quarter of 2015, a decrease from $56 million in the first quarter of 2014. Capital expenditures in the first quarter of 2015 were $57 million compared with $45 millionin the year-ago quarter. After capital expenditures, the company used $101 million of free cash in the first quarter of 2015 compared with free cash usage of $25 million in the first quarter of 2014. The company had free cash usage before pension contributions of $62 million in the first quarter of 2015 compared with free cash flow before pension contributions of $31 million in the year-ago quarter.

At March 31, 2015, the company reported a cash balance of $402 million and total debt of $224 million.

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