Unisys revenue falls on Y2K sales slump
The computer services company says its first-quarter revenue fell but was in line with lowered expectations due to a slowdown in sales following the Year 2000 transition.
The company said net income fell to $106.5 million, or 34 cents a share, from $109.9 million one year earlier, matching revised projections from First Call. Revenue fell 8.5 percent to $1.67 billion from $1.82 billion.
The Blue Bell, Pa.-based company said it also expected second-quarter revenue to be down slightly from a year ago.
"The weakness in orders was greater than I expected," Greg Gieber, an analyst at Brown Brothers Harriman, told Reuters. "The potential sales book out there in the industry is just phenomenal, but the nature of their problem is the sales force reorganization, and those things should pass."
Earlier this month, Unisys preannounced lower-than-expected first-quarter revenues. The company blamed sluggish government sales, an internal restructuring, and overall slower sales due to customers' Year 2000-related purchasing delays.
Fewer government and financial clients signed services agreements as they concentrated on fixing the Year 2000 problem in their computer networks, Unisys said in a statement.
The company competes in the professional services market against rivals Electronic Data Systems, IBM Global Services and Computer Sciences.
Unisys shares fell 44 cents to $23.63 yesterday. Last month, the company's shares surged as much as 28 percent following a report that Deutsche Telekom was looking to purchase the company.