Unisys Corporation (UIS), the information technology company, swung to a net loss for the quarter ended Jun. 30, 2014, due to fall in sales and margins.
The company made a net loss of $12.10 million or $0.24 a share in the second-quarter against a profit of $24.50 million or $0.46 a share in the previous year period. Adjusted non-GAAP earnings per share came in at $0.11, when analysts expected $0.47.
Revenue during the second-quarter slipped 6.08 percent to $806.40 million from $858.60 million in the last year period.
Gross margin contracted by 289 basis points over the previous year period to 20.49 percent. Total expenses as a percentage of revenues increased to 98.04 percent from 95.57 percent in the same period last year. That has resulted in contraction of 247 basis points in operating margins to 1.96 percent.
The company disclosed operating income of $15.80 million, compared with $38 million in the last year period.
"Our second-quarter 2014 results were impacted by lower sales of our flagship ClearPath family of enterprise software and servers, which can vary significantly from quarter to quarter based on the timing of client transactions," said Unisys chairman and CEO Ed Coleman.
"In our services business, we saw strong order growth in the quarter and were pleased by recent wins such as a significant contract with the Commonwealth of Pennsylvania to deliver one of the largest secure, cloud-based, on-demand IT computing implementations by a U.S. state government," Coleman said.
Cash Flow
Unisys Corp has generated cash of $23.40 million from operating activities during the first half, down 22.52 percent or $6.80 million when compared with the last year period. The company has generated 1.67 cents of operating cash flow in every sales dollar for the first half, down from 2.06 cents in the same period last year.
The company has spent $77.70 million cash to meet investing activities during the first half, as against cash outgo of $67.40 million in the last year period.
The company has spent $15.10 million cash to meet financing activities during the first half, as against cash outgo of $18.20 million in the last year period. It has borrowed net of $0.10 million through debt during the first half. It has raised net of $2.80 million by selling common stocks.
The company's cash dividend payment decreased 50.62 percent or $4.10 million to $4 million.
As on Jun. 30, 2014, the company's cash balance stood at $574.20 million, down 0.24 percent or $1.40 million from Jun. 30, 2013.
Working Capital
Unisys Corp has witnessed a decline in the working capital over the last one year. The company's working capital stood at $369.70 million as at Jun. 30, 2014, down $42.50 million or 10.31 percent from $412.20 million on Jun. 30, 2013. It registered a decrease in current ratio to 1.40 as at Jun. 30, 2014 from 1.43 on Jun. 30, 2013.
Debt Position
As on Jun. 30, 2014, long-term debt stood at $210 million, which was 8.99 percent of total assets.
Shares of Unisys Corp rose $1.07 or 4.41 percent to close at $25.36 on Tuesday.
