Unisys has reported 30% growth in its first quarter 2004 earnings per share (EPS), excluding the impact of pension accounting, over the prior year quarter. The company also reported a sharp improvement in cash flow from the prior year, generating $116 million of operational cash flow compared with an operational cash usage of $65 million in the prior year quarter.
Excluding the impact of pension accounting, Unisys reported first quarter 2004 net income of $44 million, or 13c per diluted share, compared with first quarter 2003 net income of $34.2 million, or 10c per diluted share. As previously announced, pension accounting will have a negative impact on the company`s reported results in 2004.
The first quarter 2004 results include pension expense of $22.2 million, compared with pension income of $6.4 million in the prior year quarter. On a generally accepted accounting principles (GAAP) basis, including pension accounting in both periods, net income for the first quarter of 2004 was $28.9 million, or 9c per diluted share, compared with net income of $38.5 million, or 12c per diluted share, in the year-ago period.
Revenue for the first quarter of 2004 grew 5% to $1.46 billion from revenue of $1.40 billion in the first quarter of 2003. Currency had a seven percentage point positive impact on the company`s revenue in the first quarter, reflecting a weak US dollar against most major currencies worldwide.
Unisys Africa MD, Barry Holt, says: "We got off to a good start in the new year by continuing our focus on operational execution. We grew our earnings per share by 30%, excluding pension accounting, and showed continued consistency in meeting our quarterly earnings targets. Equally encouraging, our cash flow continued to improve. Unisys generated $16 million of free cash flow (cash from operations less capital expenditures) in the quarter - an improvement of $170 million over the first quarter of 2003. This progress reflects the focus we have placed on cash flow and higher value-added business throughout our operations.
"In our services business, we continued to make progress in improving our operating margin - a key objective for 2004. Our first quarter 2004 services operating margin improved 120 basis points from the prior-year quarter to 4.1%, excluding the impact of pension accounting in both years. In our technology business, revenue grew 2% in the quarter. Sales of our ES7000 systems showed strong double-digit growth in the quarter, and we continued to bring in new clients."
"After a solid first quarter, we remain focused on achieving our strategic and financial objectives for 2004," Holt says. "While the industry remains extremely competitive, Unisys is winning in the marketplace because of the value-added solutions we are able to bring to clients. We continue to focus on executing our value-added strategy and delivering consistent profitable growth.
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Unisys is a worldwide IT services and solutions company. Its 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.co.za.
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