IT services and hardware vendor Unisys revealed falling revenues but a return to the black for its first-quarter results, as it continues to slash jobs. Shares were largely unchanged on the news, sliding 1% to close at $8.83 following the news.
For the three months to the end of March it recorded revenue of $1.35bn from $1.39bn in the year-ago quarter, and generated a net profit of $3.6m, up from a loss of $27.9m.
Its long term restructuring program is being extended with another 950 jobs being cut, mainly in the US and the UK, having largely completed the 5,600 headcount reduction it announced last year. Unisys took a $32.7m charge to pay for the redundancies plus another $35m charge in the second quarter for restructuring in continental Europe. It said it would cover these costs with the proceeds from the sale of its media business in the Netherlands and a tax-related refund.
UBS analyst Jason Kupferberg said that the results were a mixed bag noting that the services unit’s revenue was 5% lower than it had expected at $1.15bn. The company said that it had grown revenues in outsourcing and infrastructure services, but these gains were more than offset by declines in systems integration and consulting and core maintenance.
CEO Joe McGrath said that he was still on target to achieve an operating profit margin of between 8% and 10% in 2008, excluding retirement-related expenses.