The Blue Bell computer-maker's quarter was especially outstanding, analysts said, in contrast to that of its biggest U.S. rivals, IBM and Digital Equipment Corp. IBM earned just $86 million on operations in its third quarter - about half the lowest projection by analysts. The company had a net loss of $2.8 billion for the quarter because of an extraordinary charge. Digital had a loss of about $260.5 million for the comparable period.
IBM's lower-than-expected earnings report on Thursday sent its stock price plummeting and helped drag the Dow Jones industrial average to a loss of 20.8 points.
Unisys' results have no such effect on the Dow, but they did send its own stock price up 12.5 cents to $8.875.
Overall revenues, up just 5 percent for the quarter, actually dipped a bit for the first nine months of the year. The decline of 1 percent for the nine months was expected, however. The company's own budget calls for a slight decline in revenues this year because of "global economic weakness," according to Unisys chairman James A. Unruh. "There's always hope" for the economy, he said, "but I haven't seen much tangible evidence" that it is about to pick up and propel Unisys and other companies to big sales gains.
He said the U.S. economy continued to improve at "glacial speed," while in Europe and Japan a recovery, at least for the computer industry, remained at least a year away.
Still, by cutting costs and expenses by 2 percent in the third quarter and by 19 percent for the first nine months of the year, Unisys showed a profitable bottom line for both periods despite the anemic economy, something it was unable to do last year. The company expects to post a profit for the year, Unruh has said.
Unisys also benefited from its past losses - it was able to reduce its taxes during the quarter by $10 million thanks to the federal provision for operating loss carryforwards. So far this year, Unisys has been able to reduce its taxes by $27 million with that provision.
The company's earnings were "at the high end" of what most analysts had projected, said Curt Rohrman of First Boston Corp. "If you look at what they've done to get here, you can see they've gone through a lot of pain," he said.
That pain has included the loss of thousands of Unisys jobs. And it is bitter medicine that other mainframe-computer companies - such as IBM - must also take, he said. "They're not serious about it yet," he said of cost- cutting efforts.
"We took considerably more dramatic action than our competitors," Unruh said yesterday. "In this environment, there's no reward for slowness or being cautious in trying to adapt."
He said Unisys' reward for taking those drastic steps had been not only the immediate financial benefits but also the fact that management could now focus on building the company's future business prospects.
UNISYS CORP. (UIS) NYSE
3 QTR. '92 3 QTR. '91 PCT.
END 9/30 END 9/30 CHG.
Sales (millions) $2,067.5 $1,972.3 +5
Net income (millions) $37.7 -$106.1* N.C.
Per share $0.23 -$0.66 N.C.
9 MO. '92 9 MO. '91 PCT.
Sales (millions) $6,165.5 6,234.0 -1
Net income (millions) $130.4 -$1,564.5* N.C.
Per share $0.80 -$9.69 N.C.
N.C. = Not calculable.
* = After payment of preferred dividends, which were $30.6 million in third quarter of 1992, $30.3 million in third quarter of 1991, $91.6 million for first nine months of 1992; and $90.7 million for first nine months of 1991.