Unisys reported third-quarter 2010 net income of $28.3 million, compared with net income of $61.1 million, in the year-ago quarter. Third-quarter 2010 net income from continuing operations was $21.8 million, compared with $52.4 million, in the year-ago period. Operating results of the company's divested U.K.-based Unisys Insurance Services Limited (UISL) business and health information management business are being reported as discontinued operations.
Revenue in the third quarter of 2010 declined 13% (2 percentage points was attributable to divested businesses) to $961 million compared with $1.11 billion in the year-ago quarter. Foreign currency fluctuations had a one percentage-point negative impact on revenue in the quarter. U.S. revenue declined 15% to $438 million while revenue from international markets declined 12% (10% in constant currency) to $523 million.
"We made further progress on many fronts in the quarter as we continue to reshape the Unisys business model," stated Unisys chairman and CEO Ed Coleman. "We achieved a services operating profit margin of 8%- an important milestone that put us in our targeted 8% to 10% margin range. We also grew revenue slightly in our IT outsourcing business. Operating expenses and cash flow improved significantly, reflecting improved efficiencies across the business," Coleman said.
"After three straight quarters of strong growth, sales of our ClearPath servers declined, impacting our net income comparisons against a strong third quarter a year ago. To drive profitable growth, we continue to enhance our portfolio with innovative solutions, including new enterprise virtualization capabilities announced last week for our ClearPath server family. Our more competitive portfolio positions us to capitalize on emerging growth markets in our areas of strength."
Unisys reported a third-quarter gross profit margin of 24.7%, down from 26.9% a year ago, driven by lower sales of ClearPath enterprise servers in the quarter. Operating expenses (selling, general and administrative expenses plus research and development) declined 13% in the quarter compared to the year-ago quarter. Despite the expense reduction, third-quarter operating profit margin declined to 7.9%, down from 10.1% a year ago, reflecting the lower ClearPath sales in the current quarter. More details on the third-quarter results are available on the Unisys website.