Unisys Hit With Charge
Updated from 6:22 p.m. EST
Unisys (UIS) 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.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV