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Unisys Rides on Deal Wins, Announces New Service Contracts

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Unisys Corporation (UIS - Free Report) recently announced a string of contracts, which it signed in the second quarter of 2019. These contracts are with U.S. clients across its key industry sectors of Financial Services, Commercial and Government.

Unisys renewed its contract with a financial asset management company for an additional two years to provide digital workplace services. Moreover, the company expanded its long-standing association with a leading U.S. healthcare provider to offer better IT service desk support to hospitals in one of its largest regions in the United States.

Additionally, Unisys recently received an add-on contract with a major U.S. public higher education institution to provide an analytics-based hybrid-cloud solution. Under the contract expansion, Unisys will provide Data-as-a-Service in Amazon’s (AMZN - Free Report) cloud arm AWS public cloud, delivering infrastructure support for the institution's data pool to encourage various student-graduation initiatives.

Focus on Service Segment Drives Growth

The information technology industry is presently undergoing a transition phase, forging new disruptive trends in cloud mobility, Big Data, social computing and increasing awareness of cybersecurity.

In order to capitalize on these trends, Unisys is rationalizing its services and solution portfolio by shifting its offerings to cloud-based and software-as-a-service delivery models. The company is concentrating on business opportunities in fewer, more profitable sectors in the IT marketplace.

To drive future growth, Unisys is focusing its resources and investments in four targeted, high-potential market areas — security; data center transformation and outsourcing services; end-user outsourcing and support services; and applications modernization and outsourcing services. The company’s services unit looks set to take advantage of growth prospects of higher-margin services.

Notably, in the second quarter, Unisys reported 11.4% year-over-year growth in its Services segment. Its new offerings in this space, such as InteliServe and CloudForte, continue to complement its industry go-to market efforts. The company also launched the Unisys CloudForte for hybrid cloud environments in the quarter.

Moreover, the expanding Stealth portfolio continues to drive growth. Unisys recently launched the Stealth 4.0, which has already been integrated with security platforms of key companies like Palo Alto’s (PANW - Free Report) Panorama network security management platform, and Dell’s (DELL - Free Report) Cyber Recovery software.

Unisys’ continued enhancements and efforts to boost the Services segment have helped it secure quite a few contracts recently.    

The company’s focus on security has resulted in several large contract wins in the recent years, including those in the U.S. federal sector. This continued flow of new contracts is driving revenue growth, as reflected in its second-quarter results. Unisys generated 12.9% higher revenues year over year during the quarter.

Growth in the company’s U.S. federal and commercial sectors, coupled with an uptick in new managed services contracts within the public sector, is a tailwind. Revenues from the U.S. federal sector grew 33.1% year over year in the second quarter, the highest recorded quarterly growth in more than 20 years.

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