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Updated from 12:24 p.m. EDT


(UIS) - Get Unisys Corporation Report

reported a sharp drop in its second-quarter earnings Tuesday, missing Wall Street's

already-lowered expectations, as the computer-services company saw its revenues drop.

The worldwide information services and technology company also said its earnings and sales would be lower in the third quarter than they were in the second.

Investors, in response, punished Unisys, as the stock finished down 2 7/8, or 20%, at 11 1/4.

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Blue Bell, Pa.,-based Unisys said that excluding an extraordinary charge, its net income fell to $56.3 million, or 18 cents a diluted share, from $118 million, or 37 cents a share, in the second quarter of 1999. The latest results missed the revised consensus estimate of 19 cents a share that had been expected by analysts polled by

First Call/Thomson Financial


On April 15, the company took an after-tax extraordinary charge of $19.8 million, or 6 cents a share, for the early retirement of its remaining $400 million of 12% notes, originally due 2003. Including the charge, the company¿s net income for the quarter totaled $36.5 million, or is $56.3 million, or 12 cents a diluted share.

Revenue in the quarter declined 16% to $1.6 billion from $1.9 billion in the year-earlier period. Excluding the impact of foreign currency exchange rates, revenue in the quarter declined 13% from a year ago.

Total worldwide orders, across 100 countries, showed double-digit declines in the second quarter compared with a year earlier, as did service orders. But technology orders saw double-digit gains in the year-ago period.

The company attributed the weakened results in part to a failure to close several large technology contracts by the end of the second quarter.

"Based on the continued slow recovery in our business and the movement of some technology contracts into the fourth quarter, we expect our third-quarter revenue to be down from a year ago and our earnings per share to be below the second quarter 2000 level," Lawrence A. Weinbach, the company's chairman and chief executive, said in a statement. "We look for a pickup in revenue in the fourth quarter, particularly in our technology business, with earning per share relatively flat from year-ago levels."