Unisys Corporation (UIS) reported revenues of $1.21 billion in the fourth quarter of 2009, down 5% year over year. Foreign exchange rates had an approximately 5 percentage-point positive impact on revenue in the quarter.
Revenue in the United States declined 14% to $495 million. Revenue in international markets increased 1% to $715 million.
On a segment basis, revenue from the services segment declined 9% year over year. Customer orders in this segment showed mid single-digit declines from year-ago levels as growth in outsourcing orders was offset by declines in systems integration and consulting orders. Revenues from the technology segment increased 19% year over year. The technology business grew revenue 19% in the quarter, driven by strong sales and ClearPath systems (a family of enterprise-class servers).
Gross margin improved to 28% from 18.6% in the year-ago quarter, driven by cost efficiencies in services delivery and strong sales of ClearPath servers in the current quarter.
Operating margin improved to 10.8% compared to an operating loss of 3.7% in the year-ago quarter.
Net income came in at $114.5 million, or $2.64 per share, in the quarter compared with a loss of $58 million, or $1.59 per share, in the year-ago quarter.
Unisys generated $215 million of cash from operations in the quarter compared with $138 million in the year-ago quarter. Capital expenditures in the reported quarter were $52 million compared with $80 million in the year-ago quarter.
As of December 31, 2009, Unisys had $648 million of cash on hand, up from $544 million at the end of 2008. The company had a long term debt of $845.9 million, down from $1059.1 million at the end of 2008.
For 2009, revenues declined 12% to $4.60 billion. Foreign currency fluctuations had an approximately 4 percentage-point negative impact on revenue for the full year.
Going forward, management expects 2010 to be tough, particularly in the first half, as Unisys works through an uncertain spending environment. Management continues to focus on improving profitability and generating cash flow. Management will also focus on strengthening the balance sheet and reducing debt.
Meanwhile, Unisys recently sold its Payment hardware, Payment supplies, US-based Payment maintenance, and the associated Payment research and development and Payment sales organization to Marlin Equity Partners.
Although management is making progress in expanding margins, we remain cautiously optimistic of the pace of IT spending recovery and the maturing of higher-margin legacy product sales and services.
Based in Blue Bell, Pennsylvania, Unisys is a worldwide information technology company.
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