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Pension charges pinch Unisys earnings

The technology services company sees revenue edge up, but first-quarter net income tumbles because of pension-related accounting.

Pension costs took a toll on Unisys' first-quarter earnings, even as revenue edged slightly upward.

The Blue Bell, Pa.-based technology services company on Thursday reported first-quarter net income of $28.9 million, or 9 cents per share, a 25 percent drop from $38.5 million, or 12 cents per share, a year earlier.

Excluding the pension costs, net income for the quarter ended March 31 was $44 million, or 13 per share, up from $34.2 million, or 10 cents per share, for the same period last year.

"We grew our earnings per share by 30 percent, excluding pension accounting, and showed continued consistency in meeting our quarterly earnings targets," CEO Lawrence A. Weinbach said in a statement. "Equally encouraging, our cash flow continued to improve. Unisys generated $16 million of free cash flow" during the quarter, he said.

Earlier this month, Unisys said that Weinbach had stepped down as president and would leave the CEO post in January 2005. He's being replaced in both of those positions by Unisys executive Joseph McGrath.

Revenue for first quarter grew to $1.46 billion, up from $1.40 billion in the corresponding period last year, spurred a 5 percent gain in services revenue, the company said.

For the full year of 2004, Unisys said it continues to expect mid-single-digit revenue growth, with earnings per share of about 83 cents to 87 cents, excluding the effects of pension accounting.