Unisys Corporation UIS started 2018 on a positive note, reporting year-over-year growth in GAAP revenues and earnings for the first quarter. The company's revenues and earnings for the quarter came in at $708.4 million and 62 cents per share, respectively. In the year-ago quarter, Unisys had posted revenues of $664.5 million and a loss per share of 65 cents.
Furthermore, it should be noted that the company from the first quarter onward has adopted the new revenue recognition rules under the ASC 606 and the same it has reflected under the non-GAAP measures.
On a non-GAAP basis, the company registered a decline of 1.4% mainly due to a tough year-over-year comparison. Notably, Unisys had re-negotiated a large contract in the year-ago quarter, which had significantly driven the first-quarter 2017 revenues.
Moreover, the company reported non-GAAP earnings of 19 cents per share compared with 32 cents per share posted in the year-earlier quarter. The bottom-line results were negatively impacted by decline in non-GAAP revenues.
Unisys Corporation Price, Consensus and EPS Surprise
Unisys Corporation Price, Consensus and EPS Surprise | Unisys Corporation Quote
Quarter in Detail
The Services segment recorded revenues of $568.5 million, down 2.9% from the prior-year quarter. Technology segment's revenues increased to $139.9 million, up 76.6% from the year-earlier quarter. This segment displayed stellar revenue growth, driven by higher demand in its product line, particularly for ClearPath Forward products.
Non-GAAP operating profit for the reported quarter was $46.9 million compared with $43.6 million in the prior-year quarter. Also, non-GAAP operating profit margin was 7.2% for the quarter, up 60 basis points.
Balance Sheet and Cash Flow
As of Mar 31, 2018, Unisys had $656.4 million in cash and cash equivalents compared with $733.9 million in the previous quarter. Long-term debt (excluding current maturities) was $636.2 million compared with $633.9 million witnessed at the end of 2017. During the quarter, the company used $50.2 million of cash for operational activities. Adjusted free cash flow for the quarter was down $50.8 million.
The company reaffirmed its outlook for the current year. For 2018, the company expects GAAP and non-GAAP revenues of $2.75-$2.88 billion and $2.7-$2.83 billion, respectively. GAAP and non-GAAP operating margin are expected in the range of 9.5-10.5% and 7.8-8.8%, respectively. Adjusted EBITDA margin is projected at 13.7-14.9%.
Zacks Rank & Stocks to Consider
Currently, Unisys has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same industry space include CoStar Group, Inc. CSGP , Dell Technologies Inc. DVMT and Science Applications International Corporation SAIC , all flaunting a Zacks Rank of 1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Long-term expected earnings growth rates for CoStar Group, Dell Technologies and Science Applications International are 16.8%, 9.1% and 5%.
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