said first-quarter earnings dropped despite a 5% rise in revenue, as pension expenses overshadowed stronger operating results.
The company earned $28.9 million, or 9 cents a share, on revenue of $1.46 billion in the latest quarter compared with earnings of $38.5 million, or 12 cents a share, on revenue of $1.40 billion last year. The latest quarter included a pension expense of $22.2 million, compared with an expense of $6.4 million last year.
Excluding pension accounting, Unisys earned $44.0 million, or 13 cents a share, in the latest quarter, compared with earnings of $34.2 million, or 10 cents a share, last year. On that basis, analysts had been forecasting earnings of 9 cents a share in the most recent quarter.
Unisys said it expects to earn 14 cents to 17 cents a share in the current quarter on revenue growth in the midsingle digits. For all of 2004, the company expects to earn 83 cents to 87 cents a share on midsingle-digit revenue growth. The estimates exclude pension accounting.
Analysts surveyed by Thomson First Call were forecasting earnings of 13 cents a share on that basis in the current quarter and 69 cents a share for the full year.
Unisys said it generated $16 million of free cash flow in the first quarter, an improvement of $170 million over the first quarter of 2003. On a geographic basis, U.S. revenue grew 3% to $682 million. Revenue in international markets increased 6% to $781 million, as growth in Europe and South Pacific offset revenue declines in other regions.
Overall orders posted a double-digit decline in the first quarter compared with a year ago, reflecting the volatility of the company's outsourcing deals, the pipeline of which Unisys said remains strong.
"Orders for consulting and systems integration, infrastructure services and technology all grew in the quarter," the company said. "Outsourcing orders, which can vary significantly from quarter to quarter due to contract size and complexity, declined double digits from the first quarter of 2003, which included a very large contract with a U.K. insurance company valued at more than $450 million."