Blue Bell, Pennsylvania based
), an information technology (IT) company, has recently announced
to buyback a total of $50 million worth of its common stock and
mandatory convertible preferred stock, thereby leveraging
The company seeks to execute the program either in the open
market or through negotiated purchases. Meanwhile, the
transaction is expected to comply with 10b5-1 plans.
According to the new share repurchase program, the company
will have the discretionary power to repurchase its common stock
at any time depending on the prevailing market condition and
other associated factors.
This share buyback, to be conducted through December 31, 2014,
enhances the company's confidence in its current performances and
long-term targets. At the same time, the share buyback will help
Unisys reduce the share count, thereby increasing earnings per
share and return on equity.
Earlier, Unisys had posted a net loss (including pension
expenses) of $12.4 million or 28 cents per share in the third
quarter of 2012 compared with a net income of $46.6 million or 99
cents per share in the previous quarter. Excluding these charges
and expenses, net income for the quarter came in at 85 cents per
diluted share, easily beating the Zacks Consensus Estimate of 57
cents per share.
In addition, the company had a cash balance of $542 million
and total debt of $211 million. Its healthy balance sheet
position and positive free cash flow support the buyback
In a different story, the company recently announced to pay a
dividend of $1.5625 per share based on its outstanding 6.25%
Mandatory Convertible Preferred Stock, Series A. The dividend
will be paid on March 1, 2013 to shareholders of record as on
February 15, 2013. The company's proactive advances will not only
help enhancing investors' confidence in the company but also
boost the market value of the outstanding shares.
Unisys competes with bigwigs like
). Hewlett-Packard has also been consistently enhancing
shareholders' returns. In the fiscal fourth quarter of 2012,
Hewlett-Packard paid a total of $384 million to shareholders
through share repurchases and dividends.
The current Zacks Consensus Estimates for Unisys are $1.00 and
$2.20 for the fourth quarter of 2012 and for the full year of
2012, respectively. The estimates represent year-over-year growth
of (51.8%) for the fourth quarter of 2012 and (50.23%) for
As the macroeconomic conditions continue to be challenging, we
prefer to have a Zacks #5 Rank on the stock, which translates
into a short-term rating of 'Strong Sell'. In the long run, we
have a Neutral recommendation on the stock.
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UNISYS (UIS): Free Stock Analysis Report
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