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Unisys Corporation

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Unisys reported mixed fourth-quarter 2016 results with significant decline in GAAP revenues and earnings although adjusted earnings beat the Zacks Consensus Estimate. The company has to continually invest in new technologies which act as value drivers to provide a hedge against stiff competition. These incremental investments increase operating expenses, thus squeezing margins and negatively impacting profitability. Pension liabilities have increased lately and are likely to be a drag on its earnings in the future. In addition, Unisys is exposed to foreign currency exchange rate risks, particularly in euro due to the Brexit referendum. However, Unisys is currently aligning its services and solution portfolio by shifting its offerings to cloud-based and software-as-a-service delivery model. The company remarkably outperformed the Zacks categorized Information Technology Service industry in the last 90 days with continued focus on organic growth.


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