Unisys posts $48M net; second straight profitable quarter; Paramax, U.S. info systems sales cited

Electronic News, April 27, 1992

BLUE BELL, PA. -- Unisys Corp. registered its second consecutive profitable quarter for the initial three months of 1992, nothing an increase in orders and equipment sales. "Revenue and orders were stronger than expected, particularly at Paramax and in the U.S. information systems business," said James A. Unruh, chairman and chief executive. "Total orders showed solid growth over a year ago. There was good growth in information systems orders in the U.S., but continued softness in Europe. U.S. information systems orders increased year-over-year for the second consecutive quarter," Mr. Unruh noted.

He also said information systems products recorded the strongest gains world-wide, including large-scale mainframes which are now in the early stage of new product cycles, Unix-based systems and software products. "The new A-11 mainframe with expanded open systems capabilities, introduced in February, has been well received. Orders for Paramax Systems, which typically can vary sharply quarter to quarter, increased substantially," the executive added.

Though Unisys posted a profit of $48.3 million, or 11 cents a share, for the most recent quarter eneded March 31, against a year-earlier loss of $98.2 million, it was substantially below the $80.5 million, or 31 cents a share, earned in the immediately preceding three months.

The shortfall in earnings was due to lower revenues, which were off by $450 million, sequentially, due to some market, weakness, and end of product and business cycles, the firm said.

Revenues in the firs 1992 quarter were $2.01 billion, compared with $2.06 billion in the first 1991 quarter and $2.46 billion in the fourth 1991 quarter.

The company noted, however, that quarter-over-quarter revenues would have shown a slight increase had the 1991 figure been adjusted downward by $62 million in sales from the Timeplex subsidiary which was sold on June 30, 1991.

Service and rental fees totaled $698 million during the latest quarter, compared with $765.9 million a year prior, while equipment sales rose to $1.311 billion from $1.293 billion.

For the full 1992 year, analysts are estimating the company could earn about $285 million, or 65 cents a share. In 1991, Unisys lost $1.4 billion, which included a second-quarter restructuring charge of $1.2 billion, on revenues of $10.1 billion.

Unisys said operating expenses for the first 1992 period were at their lowest quarterly level in six years and down 17 percent from the like 1991 time. Interest expense dropped 24 percent on less borrowing and lower rates. Asset management progress continued with receivables down 12 percent from the fourth 1991 quarter and down 23 percent from first 1991 quarter. Inventories were slightly under the fourth-quarter 1991 level and 33 percent below the first-quarter 1991 mark. Total debt net of cash, declined approximately $100 million to $2.4 billion and the company's cash balance remained at just over $800 million.