News Release
UNISYS
Media Contact:
Elizabeth Douglass, 215-986-6583 elizabeth.douglass@unisys.com
Jackie Lewis, 215-986-5204 jacqueline.lewis@unisys.com
Investor Contact:
Jim Kerr, 215-986-5795 jim.kerr@unisys.com
UNISYS EXPECTS TO REPORT A LOSS FOR FOURTH QUARTER OF 2004
BLUE BELL, PA, JANUARY 11, 2005 - Unisys Corporation (NYSE: UIS) said today
that, based on preliminary, unaudited results for the quarter, it expects to
report a loss of 7 - 10 cents per share for the fourth quarter of 2004. This
compares to previous expectations of earnings per share of between 27 - 31
cents. The major items impacting the company's expected fourth-quarter 2004
results are:
* Unisys will record a pretax, non-cash impairment charge of approximately
$120 million, or 25 cents per share, to write off contract-related
capitalized assets associated with a previously discussed challenging
outsourcing operation;
* The company indicated that approximately 8 cents per share of the
earnings shortfall was caused by the revenue recognition treatment on a
large, complex, multi-element contract signed in December. Unisys had
anticipated that revenue on the hardware and operating system software
elements of this contract would be recognized in the fourth quarter as
equipment was delivered and accepted and as software licenses began.
However, upon review of the final contract, it was determined that the
appropriate accounting would be to recognize revenue on a month-to-month
basis over the five-year term of the contract. The company noted that
the timing of revenue recognition on this contract has no impact on
expected revenue, profit, or cash flows to the company over the contract
term;
* The company will record an after-tax benefit of about $25 million, or 8
cents per share, principally due to the favorable settlement of income
tax audit issues in the quarter.
Revenue for the fourth quarter of 2004 is expected to be in the $1.52 - $1.53
billion range, a decrease of approximately 7% from the prior-year quarter.
Services revenue is expected to be down slightly from year-ago levels.
Technology revenue, which was anticipated to be up year-over-year, is now
expected to decline about 20% from year-ago levels, principally due to the
revenue treatment on the large, multi-element contract.
The company expects full-year 2004 free cash flow (operational cash flow
reduced by capital expenditures) of more than $30 million, compared to previous
expectations of more than $50 million of free cash flow.
"We are disappointed by our fourth-quarter results, which came in below our
expectations," said Unisys President and CEO Joseph W. McGrath. "As we
finalize the results and complete our business reviews, we will provide further
details on the quarter when we report our actual results. We remain confident
in our value-added strategy and are committed to delivering against our
financial objectives for 2005."
McGrath said the company has not changed its previous outlook for non-GAAP full-
year 2005 earnings per share.
These fourth-quarter 2004 results are preliminary, subject to the completion of
year-end closing.
Unisys said it will release its final fourth-quarter 2004 results on Tuesday,
January 25 before the opening of trading on the New York Stock Exchange.
Following the release on January 25, the company will hold a conference call
with the financial community from 8:15 - 9:15 a.m. Eastern Time to discuss the
results. The company will offer a live, listen-only Webcast of the conference
call via a link on the Unisys Investor Web site at www.unisys.com/investor. A
replay of the Webcast will be available on the Unisys Investor Web site shortly
following the conference call.
ABOUT UNISYS
Unisys is a worldwide information technology services and solutions company.
Our people combine expertise in consulting, systems integration, outsourcing,
infrastructure and server technology with precision thinking and relentless
execution to help clients, in more than 100 countries, quickly and efficiently
achieve competitive advantage. For more information, visit www.unisys.com.
FORWARD-LOOKING STATEMENTS
Any statements contained in this release that are not historical facts are
forward-looking statements as defined in the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include, but are not limited
to, any projections of earnings, revenues or other financial items; any
statements of the company's plans, strategies or objectives for future
operations; statements regarding future economic conditions or performance; and
any statements of belief or expectation. All forward-looking statements rely
on assumptions and are subject to various risks and uncertainties that could
cause actual results to differ materially from expectations. Statements in
this release regarding the company's financial outlook are based in part on the
company's assumptions for the economy. Risks and uncertainties that could
affect the company's future results include general economic and business
conditions; the effects of aggressive competition in the information services
and technology markets on the company's revenues, pricing and margins and on
the competitiveness of its product and services offerings; the level of demand
for the company's product and services and the company's ability to anticipate
and respond to changes in technology and customer preferences; the company's
ability to grow outsourcing and infrastructure services and its ability to
effectively and timely complete the related solutions implementations, client
transitions to the new environment and work force and facilities
rationalizations and to fully recover the associated outsourcing assets; the
company's ability to drive profitable growth in consulting and systems
integration; the degree of market acceptance of the company's high-end
enterprise servers; the company's ability to maintain tight cost controls; the
risks of doing business internationally and the potential for infringement
claims to be asserted against the company or its clients. Additional
discussion of these and other factors that could affect Unisys future results
is contained in its periodic reports as filed with the Securities and Exchange
Commission. Unisys assumes no obligation to update any forward-looking
statements.
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RELEASE NO: 0111/8486
http://www.unisys.com/about__unisys/news_a_events/01118486.htm
Unisys is a registered trademark of Unisys Corporation.