Thu, 13 Apr 2000, 1:30pm EDT

Unisys 1st-Qtr Net Falls on Y2K Concern, Sales Force (Update1)

By Jeff Bliss

Blue Bell, Pennsylvania, April 13 (Bloomberg) -- Unisys Corp., which warned last week of lower first-quarter revenue, said net income fell 3.1 percent amid delayed computer-service contracts and a revamping of its sales force.

Second-quarter revenue also will be slightly lower than a year ago, Unisys warned. Revenue fell 8.5 percent to $1.67 billion from $1.82 billion in the first quarter.

Net income dropped to $106.5 million, or 34 cents a share, from $109.9 million, or 31 cents after payment of preferred dividends, a year earlier. The company didn't pay a preferred dividend in the recent period.

Fewer government and financial clients signed services agreements as they focused on fixing the Year 2000 glitch in their computer networks, Unisys said. An effort to merge the company's three sales forces slowed revenue growth.

``Whenever you undertake a sales force reorganization, it always seems to take longer than you thought,'' said James

Corridore, an analyst at Standard & Poor's Equity Group, who rates Unisys an ``accumulate.''

Corridore compared the reorganization to Xerox Corp.'s January 1999 plan to retrain its 15,000 salespeople. The Xerox effort slowed employees' ability to sell machines and service contracts.

Unisys shares rose 1/8 to 23 3/4 in midmorning trading. They have slid 17 percent during the past year.

Unisys, based in Blue Bell, Pennsylvania, competes with International Business Machines Corp. in installing and maintaining other companies' networks.

Earnings matched the average estimate of analysts surveyed by First Call/Thomson Financial.

Unisys was able to meet expectations by keeping costs in line, Corridore said. ``It reflects a commitment to cost controls,'' he said.

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Technology%20News&s1=blk&tp=ad_topright_tech&T=markets_fgcgi_content99.ht&s2=blk&bt=ad_bottom_tech&s=AOPXcyhSzVW5pc3lz

-- Carl Jenkins (Somewherepress@aol.com), April 13, 2000