Unisys narrows loss amid restructure

IT consultants Unisys have narrowed its second-quarter loss as it worked on a restructuring programme.

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IT consultancy Unisys has narrowed its second-quarter loss as it worked on a restructuring programme.

Unisys' loss totalled $65.5m (£31.75m), or 19 cents per share for the quarter ended 30 June, compared with a loss of $194.6m (£94.35m), or 57 cents per share, in the second quarter of last year.

The systems integrators said the loss stemmed largely from a $24m pre-tax restructuring charge to cover the cost of facility consolidations and work force reductions and a $40.6m tax expense. Unisys announced reductions of 5,600 employees in 2006 and additional 950 this year.

Unisys also had a pre-tax retirement-related expense of $24.5m in the quarter.

Unisys said lower services and technology costs, along with decreased selling and administrative costs, led it to an undersized profit of $2.5m in the second quarter, compared to a loss of $183.7m in the prior year's second quarter.

The company's revenue declined 2% to $1.38bn in the most recent quarter from $1.41bn in the quarter a year ago.

But Unisys expects to be generating cost savings from its restructuring programme at an annual rate of more than $340m by the second half of this year and more than $365m by the first half of next year.

The firm has had some notable contract wins during the quarter, including a five-year framework awarded to a Unisys-led consortium by the European Commission's Taxation and Customs Union Directorate-General. Under the terms of the deal, the union can order up to £48.2m in IT operations and support services from the consortium, of which 39% of the order is expected to come from Unisys.

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