Unisys Posts First-Quarter 2014 Financial Results [Professional Services Close - Up]
(Professional Services Close - Up Via Acquire Media NewsEdge) Unisys Corp. on April 22 reported a first-quarter 2014 net loss of $53.5 million, or a loss of $1.15 per diluted share, which included $19.3 million of pension expense.
In a release on April 22, the Company noted that in the first quarter of 2013 the company reported a net loss of $33.9 million, or a loss of 77 cents per diluted share, which included $22.3 million of pension expense. Excluding pension expense in both periods, the non-GAAP diluted loss per share(2) in the first quarter of 2014 was 74 cents compared with a non-GAAP diluted loss per share of 26 cents in the first quarter of 2013.
First-quarter 2014 revenue declined 6 percent to $762 million from $810 million in the year-ago quarter. On a constant currency basis, first-quarter 2014 revenue declined 4 percent.
"Following a strong fourth quarter of 2013, our first-quarter 2014 revenue and margins were impacted by lower sales of technology and IT services projects, while cash from operations improved over the year ago quarter," said Unisys Chairman and CEO Ed Coleman. "We look for improved results through the course of the year, driven in part by anticipated full-year growth in our technology business. We are confident in our strategy and are optimistic about the investments we are making in new products such as our Stealth cybersecurity software, our Forward! by Unisys fabric-based server platform, and our cloud-based offerings."
First-Quarter Company and Business Segment Highlights
U.S. revenue declined 5 percent in the quarter. U.S. Federal government revenue grew 2 percent. International revenue declined 7 percent. On a constant currency basis, international revenue declined 4 percent.
First-quarter 2014 services revenue declined 4 percent from the prior-year quarter driven by lower outsourcing and infrastructure services revenue. Reflecting the lower services revenue, first- quarter 2014 services gross profit margin declined to 15.8 percent from 17.4 percent a year ago while services operating profit margin declined to 1.9 percent from 3.1 percent a year ago.
First-quarter 2014 services orders decreased from year-ago levels primarily driven by lower outsourcing orders. Services backlog at March 31, was $4.5 billion compared to $4.8 billion at December 31, 2013.
First-quarter 2014 technology revenue declined 19 percent from the prior-year quarter driven by lower sales of ClearPath enterprise software and servers. Reflecting the lower ClearPath sales, first- quarter 2014 technology gross profit margin declined to 42.5 percent from 45.8 percent in the year-ago quarter and technology operating profit (loss) margin declined to (21.2) percent from 0.2 percent in the year-ago quarter.
The company reported an overall first-quarter 2014 gross profit margin of 17.5 percent compared with 19.9 percent in the year-ago quarter. Operating expenses (SG&A and R&D expenses) declined 4 percent from the year-ago period. The company reported a first- quarter 2014 operating loss of $19.9 million compared with an operating profit of $1.6 million in the first quarter of 2013.
Cash Flow and Balance Sheet Highlights
Unisys generated $20 million of cash from operations in the first quarter of 2014 compared to $14 million in the first quarter of 2013. Cash from operations included pension contributions of $56 million in the first quarter of 2014, an increase from $27 million in the first quarter of 2013. Capital expenditures in the first quarter of 2014 were $45 million compared with $26 million in the year-ago quarter. After capital expenditures, the company used $25 million of free cash(3) in the first quarter of 2014 compared with free cash usage of $12 million in the first quarter of 2013. Free cash flow before pension contributions increased to $31 million in the first quarter of 2014 from $15 million in the year-ago quarter.
At March 31, the company reported a cash balance of $614 million and total debt of $210 million.
Unisys is an information technology company.
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