Updated from 6:22 p.m. EST
Unisys (UIS - Get Report) revised its fiscal third-quarter earnings Wednesday to take a $1.57 billion noncash charge that reflects a review of deferred tax assets. The IT services firm also reiterated fourth-quarter income guidance.
After the bell, Blue Bell, Pa.-based Unisys said it took the noncash charge, which equates to $4.62 a share, to reserve against all of its deferred tax assets in the U.S. and certain international subsidiaries. "As we generate taxable income in the future, these deferred tax assets could be realized over time," the company said.
Including the $1.57 billion noncash charge and a pretax charge of $10.7 million related to the company's cash tender for its 8 1/8% notes due 2006, Unisys reported a third-quarter loss of $1.63 billion, or $4.78 a share. This reverses third-quarter net income of $25.2 million, or 7 cents a share, a year earlier, which included a net benefit of $8.2 million, or 2 cents a share, from a tax benefit net of a charge for cost reduction actions.Unisys said its increase in the valuation allowance reflects a number of factors, including recent financial performance, reduced 2005 financial expectations and restructuring plans. Unisys reiterated previous guidance calling for pretax income of $50 million to $75 million. But the company said prior guidance of earnings ranging from 10 cents to 15 cents a share assumed a tax rate of 32%, which will change as a result of the deferred tax asset valuation allowance, depending on the geographic mix of income. Shares recently slid 46 cents, or 8.3%, to $5.56 in recent after-hours trading; shares closed up a penny at $5.56 in the regular session.