Unisys

(UIS) - Get Report

reported a narrowed loss in the first quarter, with a number of special items affecting the bottom line. Revenue edged up 2% to $1.39 billion, slightly better than forecast.

Unisys lost $27.9 million, or 8 cents a share, in the quarter, including three pretax items: a charge of $145.9 million for headcount reductions; a gain of $45 million related to curtailment of defined benefits; and a gain of $149.9 million related to an asset sale. The company lost $45.5 million, or 13 cents a share, a year ago.

Analysts were forecasting a loss of 6 cents a share in the most recent period, although the estimate probably is not comparable to Unisys' bottom line.

Revenue rose 2% from last year to $1.39 billion, with currency effects reducing the growth rate by 3 percentage points. Analysts were forecasting revenue of $1.37 billion in the latest period.

Unisys said overall orders rose by a percentage point in the double digits in the first quarter, although technology orders fell by a percentage in the mid single digits. The gross profit margin was 14.5% and the operating margin was a negative 12.2% in the latest period.

"During the first quarter we executed against our previously announced plan to reposition Unisys for profitable revenue growth over the 2007-2008 timeframe," Unisys said. "Over the course of a 90-day period, we generated $378 million of cash through the sale of an asset, began our cost reduction actions, completed the renegotiation of a challenging outsourcing joint venture, made changes to our U.S. pension plans, realigned our worldwide sales efforts to focus on expanding our business with our top 500 clients and top 10 geographies, and realigned our services delivery operation."

"We continue to see 2006 as a transitional year," it said. "We continue to expect some short-term impact on the business as we implement the repositioning actions, but we expect to see tangible benefits in our financial results as we move into 2007."