Unisys has reported strong growth in its fourth quarter and full-year 2002 earnings per share, achieving its targeted earnings range for the year. The company also reported better-than-expected cash flow in the fourth quarter of 2002 and expects double-digit earnings per share growth in 2003.
For the fourth quarter of 2002, the company`s net income rose to $89.1 million, or 27c per share, compared to a fourth quarter 2001 net loss of $169.4 million, or a loss of 53c per share, that included a pre-tax charge of $276.3 million for cost reduction actions.
Excluding this charge, net income in the fourth quarter of 2001 was $34.4 million, or 11c per share. The 27c for fourth quarter 2002 represented a 145% increase over the 11c, before the charge, in 2001. The company reported fourth-quarter 2002 revenues of $1.55 billion, essentially equal to its revenue in the 2001 fourth quarter.
"Unisys ended a successful year with a strong fourth quarter," says Barry Holt, MD of Unisys Africa. "The company significantly grew its earnings and achieved a fourth-quarter operating profit margin of 9.7%, double its margin of a year ago."
This was driven by sharp improvement in the services operating margins, which increased to 7.1% from 3% in the fourth quarter of 2001. Unisys`s technology business also had a very solid profit performance in the fourth quarter, achieving a 15.7% operating margin, an increase of more than 5% from its technology-operating margin in the fourth quarter of 2001.
According to Holt, Unisys started 2002 with a clear overall objective: to significantly improve profit margins and earnings per share. This objective was achieved by being highly focused and disciplined in the types of business opportunities the company pursued in the market. The value-added, end-to-end business strategy is now delivering results.
Major long-term services contracts signed during the quarter included:
* A major seven-year business process outsourcing (BPO) agreement with Washington Mutual, one of the largest financial institutions in the US and a new Unisys client. Unisys will host and manage the company`s cheque processing operations using image-based technology.
* A seven-year BPO contract from RAMS Home Loans, the second-largest non-bank mortgage originator in Australia. Unisys will assume management of RAMS` mortgage processing operations.
* A seven-year BPO contract to provide cheque clearing and processing services for Malayan Banking Berhad (Maybank), the largest financial institution in Malaysia.
* A three-year contract from Germany`s Bavarian Ministry of Justice, to provide a full range of managed infrastructure services supporting more than 12 000 end-users in 200 locations across the country.
"These client wins, three of which are new clients to Unisys, were achieved in a tough spending environment. They are an indicator that Unisys has the right offering in the marketplace, and that clients recognise the value it can bring to their organisations," says Holt.
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