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Unisys' (UIS) Q2 Earnings and Revenues Surpass Estimates

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Unisys Corporation (UIS - Free Report) reported a solid second-quarter of 2018, wherein both the top line and bottom line beat the Zacks Consensus Estimate.

The company’s revenues and earnings per share (EPS) came in at $667.4 million and 39 cents, respectively, topping the Zacks Consensus Estimate of revenues of $661 million and EPS of 27 cents. In the year-ago quarter, Unisys had posted revenues of $666.2 million and EPS of 6 cents.

Adjusted EBITDA surged 46% from prior-year quarter to $99 million.

Unisys Corporation Price, Consensus and EPS Surprise

 

Unisys Corporation Price, Consensus and EPS Surprise | Unisys Corporation Quote

Quarter in Detail

The Services segment generated revenues of $586.7 million, up 2.1% from the prior-year quarter, constituting 88% of the total quarterly revenues. Services backlog increased 27% year over year to $4.6 billion.

Unisys’ continued focus on increasing the efficiency of its Services delivery engine through increased automation and artificial intelligence is reflected in the quarterly performance of the Services segment.

Technology segment’s revenues were $80.7 million, down 11.7% from the year-earlier quarter..

In the reported quarter, the company launched Unisys InteliServe, a user-centric service desk platform, as well as Unisys CloudForte, a platform to accelerate digital transformation of clients.

Also, during the second quarter, Unisys successfully incorporated a Stealth solution for a U.S federal national security agency to provide improved biometric identity management capabilities.

Operating Metrics

Non-GAAP operating profit for the reported quarter was $55.6 million compared with $26 million in the prior-year quarter.

Non-GAAP operating profit margin was 8.3%, up 440 basis points year over year.

Balance Sheet and Cash Flow

As of Jun 30, 2018, Unisys had $584.3 million in cash and cash equivalents compared with $656.4 million in the previous quarter.

Long-term debt (excluding current maturities) was $638.1 million compared with $636.2 million witnessed at the end of previous quarter.

During the quarter, the company used $11.7 million of cash for operational activities. Adjusted free cash outflow for the quarter was $4.6 million.

Outlook

The company reaffirmed its outlook for 2018. The company expects non-GAAP revenues of $2.7-$2.83 billion in the year. Non-GAAP operating margin is expected in the range of 7.8-8.8%. Adjusted EBITDA margin is projected to be 13.7-14.9%.

Zacks Rank and Stocks to Consider

Unisys currently has a Zacks Rank #3 (Hold).

Some top-ranked stocks in the broader technology sector are Adobe (ADBE - Free Report) , Momo Inc. (MOMO - Free Report) , and SCIENCE APPLICATIONS INTERNATIONAL CORPORATION (SAIC - Free Report) , each sporting a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Adobe, Momo and SCIENCE APPLICATIONS INTERNATIONAL is projected to be 16.20%, 22% and 5%, respectively.

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