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Unisys (UIS) Up 9.5% Since Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Unisys Corporation (UIS - Free Report) . Shares have added about 9.5% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is UIS due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Unisys started 2018 on a positive note, reporting year-over-year growth in GAAP revenues and earnings for the first quarter. The company’s revenues and earnings for the quarter came in at $708.4 million and 62 cents per share, respectively. In the year-ago quarter, Unisys had posted revenues of $664.5 million and a loss per share of 65 cents.
Furthermore, it should be noted that the company from the first quarter onward has adopted the new revenue recognition rules under the ASC 606 and the same it has reflected under the non-GAAP measures.
On a non-GAAP basis, the company registered a decline of 1.4% mainly due to a tough year-over-year comparison. Notably, Unisys had re-negotiated a large contract in the year-ago quarter, which had significantly driven the first-quarter 2017 revenues.
Moreover, the company reported non-GAAP earnings of 19 cents per share compared with 32 cents per share posted in the year-earlier quarter. The bottom-line results were negatively impacted by decline in non-GAAP revenues.
Quarter in Detail
The Services segment recorded revenues of $568.5 million, down 2.9% from the prior-year quarter. Technology segment’s revenues increased to $139.9 million, up 76.6% from the year-earlier quarter. This segment displayed stellar revenue growth, driven by higher demand in its product line, particularly for ClearPath Forward products.
Non-GAAP operating profit for the reported quarter was $46.9 million compared with $43.6 million in the prior-year quarter. Also, non-GAAP operating profit margin was 7.2% for the quarter, up 60 basis points.
Balance Sheet and Cash Flow
As of Mar 31, 2018, Unisys had $656.4 million in cash and cash equivalents compared with $733.9 million in the previous quarter. Long-term debt (excluding current maturities) was $636.2 million compared with $633.9 million witnessed at the end of 2017. During the quarter, the company used $50.2 million of cash for operational activities. Adjusted free cash flow for the quarter was down $50.8 million.
Outlook
The company reaffirmed its outlook for the current year. For 2018, the company expects GAAP and non-GAAP revenues of $2.75-$2.88 billion and $2.7-$2.83 billion, respectively. GAAP and non-GAAP operating margin are expected in the range of 9.5-10.5% and 7.8-8.8%, respectively. Adjusted EBITDA margin is projected at 13.7-14.9%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter.
At this time, UIS has a poor Growth Score of F. Its Momentum is doing a lot better with a C. The stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than momentum investors.
Outlook
Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. It comes with little surprise UIS has a Zacks Rank #3 (Hold). We expect an above average return from the stock in the next few months.
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Unisys (UIS) Up 9.5% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Unisys Corporation (UIS - Free Report) . Shares have added about 9.5% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is UIS due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Unisys Tops Q1 Earnings & Revenues, Repeats '18 View
Unisys started 2018 on a positive note, reporting year-over-year growth in GAAP revenues and earnings for the first quarter. The company’s revenues and earnings for the quarter came in at $708.4 million and 62 cents per share, respectively. In the year-ago quarter, Unisys had posted revenues of $664.5 million and a loss per share of 65 cents.
Furthermore, it should be noted that the company from the first quarter onward has adopted the new revenue recognition rules under the ASC 606 and the same it has reflected under the non-GAAP measures.
On a non-GAAP basis, the company registered a decline of 1.4% mainly due to a tough year-over-year comparison. Notably, Unisys had re-negotiated a large contract in the year-ago quarter, which had significantly driven the first-quarter 2017 revenues.
Moreover, the company reported non-GAAP earnings of 19 cents per share compared with 32 cents per share posted in the year-earlier quarter. The bottom-line results were negatively impacted by decline in non-GAAP revenues.
Quarter in Detail
The Services segment recorded revenues of $568.5 million, down 2.9% from the prior-year quarter. Technology segment’s revenues increased to $139.9 million, up 76.6% from the year-earlier quarter. This segment displayed stellar revenue growth, driven by higher demand in its product line, particularly for ClearPath Forward products.
Non-GAAP operating profit for the reported quarter was $46.9 million compared with $43.6 million in the prior-year quarter. Also, non-GAAP operating profit margin was 7.2% for the quarter, up 60 basis points.
Balance Sheet and Cash Flow
As of Mar 31, 2018, Unisys had $656.4 million in cash and cash equivalents compared with $733.9 million in the previous quarter. Long-term debt (excluding current maturities) was $636.2 million compared with $633.9 million witnessed at the end of 2017. During the quarter, the company used $50.2 million of cash for operational activities. Adjusted free cash flow for the quarter was down $50.8 million.
Outlook
The company reaffirmed its outlook for the current year. For 2018, the company expects GAAP and non-GAAP revenues of $2.75-$2.88 billion and $2.7-$2.83 billion, respectively. GAAP and non-GAAP operating margin are expected in the range of 9.5-10.5% and 7.8-8.8%, respectively. Adjusted EBITDA margin is projected at 13.7-14.9%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter.
Unisys Corporation Price and Consensus
Unisys Corporation Price and Consensus | Unisys Corporation Quote
VGM Scores
At this time, UIS has a poor Growth Score of F. Its Momentum is doing a lot better with a C. The stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than momentum investors.
Outlook
Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. It comes with little surprise UIS has a Zacks Rank #3 (Hold). We expect an above average return from the stock in the next few months.