The house the Michael Blumenthal created, Unisys Corp, continues to justify the old joke Honey I shrunk the company as half-year turnover declined 9% to $3,448m, with sales off a daunting 18% at $1,950m, and only services growing – but at least the Blue Beller did manage to stay in profit. The company’s chief executive […]
The house the Michael Blumenthal created, Unisys Corp, continues to justify the old joke Honey I shrunk the company as half-year turnover declined 9% to $3,448m, with sales off a daunting 18% at $1,950m, and only services growing – but at least the Blue Beller did manage to stay in profit. The company’s chief executive James Unruh has to say sadly Our results in the quarter did not meet our expectations. As we announced in June, our European business is experiencing a slower than anticipated recovery. Additionally, our government systems business continues to be impacted by a decline in government spending. Nevertheless, he still finds reasons to be cheerful, saying Despite these current business conditions, the transformation of Unisys to a premier information management solutions provider is on track. Information services and systems integration is now the largest source of revenue for the corporation, accounting for 27% of total revenue. In the quarter, services revenue grew 31%. The company says it is continuing to invest heavily to expand its services capabilities with a goal of nearly doubling the employment of information services principals by year-end 1994, and looks to that strategy finally to get the incredible shrinking company back onto a growth tack again. Government business declined in the quarter, and worldwide commercial revenue was flat year to year. European information services revenue grew substantially in the second quarter, it says. But despite economic forecasts for improvement in some European countries, the company says it has not seen an increase in capital spending among major clients. Mainframe sites are still going dark all over Europe, and revenue from large systems and the related software, and associated hardware maintenance revenue, were down significantly in the quarter compared to a year ago and the decline was a principal contributor to gross margin reductions in Europe, it says. But total European orders were up slightly over a year ago on the strength of a substantial increase in services. Products and services showing the strongest order increase were information services and systems integration, Unix-based servers, personal computers and the 2200/500 CMOS-based enterprise server. In the near term, we remain cautious about business conditions and will maintain tight controls on costs, says Unruh. We are encouraged longer term by order strength in our commercial business. And our goal is to achieve overall revenue growth year over year by the fourth quarter, he concluded.