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Unisys Corporation (UIS) Q4 Earnings Beat, Revenues Lag

Unisys CorporationUIS reported mixed fourth-quarter and full-year 2016 results.

The company is poised to grow on the back of improved cost structure and increased free cash flow generation.

Over the last three months, shares of this Zacks Rank #3 (Hold) stock recorded a return of 31.43% - outperforming 7.20% return provided by the Zacks categorized Information Technology Service industry.

Inside the Headlines

Quarterly non-GAAP earnings came in at 60 cents per share, surpassing the Zacks Consensus Estimate of 55 cents. However, the bottom line fell short of the year-ago tally of $1.58 per share.

The company reported a GAAP loss of 2 cents per share, as against the earnings of 2 cents recorded in the year-ago period.

For full-year 2016, non-GAAP earnings came in at $2.03 per share versus $2.26 per share reported in the prior-year period. Meanwhile, GAAP loss was 95 cents per share for 2016, narrower than the loss of $2.20 per share recorded in the year-ago period.

Quarterly revenues were $721.7 million, lower than the Zacks Consensus Estimate of $734 million. The top line also fell short of the prior-year tally of $789.9 million.

For full-year 2016, Unisys Corporation generated revenues worth $2,820.7 million, down 6.4% year over year.

Segmental Performance

During the quarter, revenues of the company's Services segment were 596.5 million, down 8.1% year over year.

Revenues of Technology segment summed $125.2 million, down 11.1% year over year.

Margins

The company's quarterly cost of sales was $561.5 million, down 11% year over year. Selling general and administrative expenses came in at $109.8 million versus $130 million in the year-ago quarter. Operating margin expanded 290 basis points (bps) to 4.9%.

Balance Sheet/Cash Flow

In Dec 31, 2016, cash and cash equivalents came in at $370.6 million versus $365.2 million recorded at the end of 2015. Long-term debt was $194 million as against $233.7 million recorded in Dec 31, 2015.

Exiting fourth-quarter 2016, the company generated cash worth $218.2 million from operating activities versus $1.2 million recorded in the year-ago period.

Adjusted free cash flow was at $117 million, flat year over year.

The company's capital expenditure was $32.5 million in fourth-quarter 2016, down from $49.6 million in the prior-year quarter.

Outlook

Unisys Corporation intends to boost its near-term top and bottom lines on the back of disciplined financial focus, appropriate implementation of ongoing vertical go-to-market strategy and unique product offerings. Notably, during the reported quarter, the company inked several contracts. All these deals would likely fortify its business in the quarters ahead.

Unisys Corporation Price, Consensus and EPS Surprise

Unisys Corporation Price, Consensus and EPS Surprise | Unisys Corporation Quote

Stocks to Consider

Some better-ranked stocks within the industry are listed below:

Applied Optoelectronics, Inc. AAOI has a whopping average earnings surprise of 106.74% for the last four quarters and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Broadcom Limited AVGO flaunts a Zacks Rank #1 and has an average earnings surprise of 6.36% for the past four quarters.

ADTRAN, Inc. ADTN currently carries a Zacks Rank #2 (Buy) and has an average earnings surprise of 35.82% for the trailing four quarters.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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