Unisys Corporation (NYSE: UIS) has released the financial results for 2Q2016 and the performance was mixed. While the bottom-line improved significantly compared to a year-ago, the topline slightly deteriorated.
But the management sounded bullish, saying that there is still ample room to improve sales and cut costs, which should see both top and bottom lines improve in the future.
How Unisys Corporation (NYSE: UIS) fared in 2Q
Unisys Corporation (NYSE: UIS) posted adjusted diluted EPS of $0.81, which rose sharply above EPS of $0.33 in the like quarter last year. Consolidated revenue came in at $748.9 million, down 2% compared with the revenue figure in the year-ago quarter.
What happened to the topline?
Unisys’ revenue numbers were rattled by weakness in the Services business. The company reported Services revenue of $613.8 million, representing 82% of total revenue for the quarter. But Services business disappointed business revenue there declined 7.2% YoY.
However, Technology business performed well as revenue in the division rose nearly 31%. But the increase in Technology revenue wasn’t enough to stem a pullback in consolidated revenue.
Despite the revenue pressures in Services business, gross margins in the division improved in the latest quarter. Unisys Corporation (NYSE: UIS) reported Services gross margin of 16.8%, an improvement of 110 basis points over the same quarter in prior year. Margins in the Technology business also improved.
The company posted an overall operating margin improvement of 1310 basis points to 6.6% in the latest quarter. The management credited the operating margin improvement to ongoing cost curtailment efforts that has saw the company drop $30 million in costs during 2Q2016.
Unisys Corporation (NYSE: UIS) is targeting to cut $200 million in cost this year and it has already achieved $155 million in cost reduction. In 2017 is hoping to reduce cost further by $30 million. These cost reductions should provide margin lift, thus paving the way for the company to post superior earnings in the coming quarters.