Latest news with #Ex-L&S
Yahoo
28-07-2025
- Business
- Yahoo
Should You Buy, Sell, or Hold Unisys Stock Before Q2 Earnings?
Unisys Corporation UIS is scheduled to release second-quarter 2025 results on July Zacks Consensus Estimate for UIS' second-quarter bottom line is pegged at a loss of 34 cents, indicating a decline of 312.5% from earnings per share (EPS) of 16 cents reported in the prior-year quarter. The consensus mark has remained unchanged over the past 30 days. UIS Earnings Estimate Trend Image Source: Zacks Investment Research The consensus mark for second-quarter revenues is pegged at $442.5 million, indicating a fall of 7.5% from the year-ago quarter's reported company has an impressive earnings surprise history. UIS' earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, the average surprise being 46.9%. UIS Earnings Surprise History Image Source: Zacks Investment Research Q2 Earnings Whispers for UIS Stock Our proven model does not conclusively predict an earnings beat for Unisys this time. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. However, that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can see the complete list of today's Zacks #1 Rank stocks here. Factors Shaping UIS' Upcoming Results Unisys' second-quarter performance is expected to have reflected the company's continued progress on strategic backlog conversion, enhanced field services momentum, and ramp-up of digital workplace offerings. Sequential improvement in Ex-L&S revenue, coupled with strength in Device Subscription Services (DSS) and AI-driven enterprise solutions, likely supported performance in the to-be-reported the second quarter, Unisys projects approximately $375 million in Ex-L&S revenues, indicating mid-single-digit sequential growth. Given renewal timing dynamics, Ex-L&S revenues are expected to remain comparable on a sequential basis, with 35% of the year's Ex-L&S revenues expected in the first half and 65% in the second half. Strength in signings — particularly multi-year infrastructure and modernization contracts — is expected to have aided the company's performance in the second quarter. Growth in enterprise storage and increased demand for PC refreshes, supported by Windows 11 transition and AI compatibility needs, may have lifted field service volumes. Meanwhile, the ramp-up of DSS contract signings likely contributed to top-line traction, especially in the Digital Workplace Solutions investments in next-gen offerings such as Post-Quantum Cryptography advisory, Service Experience Accelerator, and agentic AI frameworks are expected to have driven early-stage growth in the Cloud, Applications & Infrastructure (CA&I) segment. Strategic signings in managed security services and data modernization, especially within financial services and Latin American power distribution, may have supported the company's performance in the second timing-related headwinds from license and support (L&S) renewals and softness in discretionary public sector project work, especially among state, local and higher education clients, may have tempered revenue growth in parts of the portfolio. Additionally, cautious client budgeting and extended decision-making cycles — driven by macro and geopolitical uncertainty — may have delayed in-quarter revenue conversion from new pipeline for the quarter may have faced moderate pressure as the company ramped labor and training costs ahead of expected hardware deployment and delivery acceleration. While Unisys continues to benefit from structural SG&A reductions, incremental hiring to support enterprise storage and liquid cooling solutions may have tempered near-term margin expansion. UIS Stock Price Performance & Valuation Unisys shares have gained 9.3% in the past three months, outperforming the Zacks Computers - IT Services industry's growth of 3.6%. Industry players like AI and Leidos Holdings LDOS have gained 15.2% and 12%, respectively, while DXC Technology Company DXC has lost 8.6% in the same time frame. UIS Three-Month Price Performance Image Source: Zacks Investment Research From a valuation perspective, Unisys stock is currently trading at a discount. UIS is currently trading at a forward 12-month price-to-sales (P/S) multiple of 0.15X, below the industry average of 18.58X. Other industry players, such as Leidos Holdings and DXC Technology, have P/S ratios of 7.1X, 1.2X and 0.21X, respectively. Image Source: Zacks Investment Research Investment Considerations for UIS Stock Unisys is positioning itself to capture a larger share of enterprise IT spend by expanding its presence in high-growth areas such as digital workplace services, cybersecurity and AI-enabled solutions. The company's transformation strategy emphasizes deeper client penetration through device subscription services, next-gen compute offerings, and secure data platforms. Strong momentum in new business signings, including high-volume DSS contracts and expanded security engagements, reflects growing demand for Unisys' differentiated solutions. Strategic alliances with technology partners, improved delivery efficiency, and a renewed focus on recurring high-margin License & Support revenue further enhance the company's visibility into long-term cash generation and margin Unisys faces transitional challenges tied to the timing of contract ramp-ups, hardware-driven revenue mix, and macro-sensitive public sector engagements. Upfront investments in workforce training, infrastructure field services, and advanced AI frameworks may exert near-term pressure on gross margins as revenue scales. External factors such as delayed decision-making in state and local government contracts, as well as broader geopolitical and trade uncertainties, could influence client spending behavior. While management remains confident in its full-year revenue and profitability outlook, execution on backlog conversion and margin stabilization remains vital. How Should You Play UIS Pre-Q2 Earnings? Unisys' upcoming second-quarter results will reflect both its strategic progress and the inherent challenges of a business in transformation. While the company is making headway in high-growth segments like digital workplace services, AI-led solutions, and cybersecurity, short-term pressures from license renewal timing, cautious public sector spending, and upfront investment costs may weigh on margins and revenue remains compelling, with UIS trading at a significant discount to peers, and recent contract wins suggest long-term growth potential. However, the near-term earnings trajectory appears uncertain, particularly given the projected year-over-year EPS decline and modest revenue this mixed backdrop, Unisys stock appears best suited for a Hold stance at this juncture. Investors may consider staying on the sidelines until greater clarity emerges after the second-quarter earnings release. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Unisys Corporation (UIS) : Free Stock Analysis Report Inc. (AI) : Free Stock Analysis Report Leidos Holdings, Inc. (LDOS) : Free Stock Analysis Report DXC Technology Company. (DXC) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
02-05-2025
- Business
- Yahoo
Unisys Corp (UIS) Q1 2025 Earnings Call Highlights: Navigating Challenges with Strategic Growth ...
Revenue: $432 million, down 11.4% year over year as reported, and 8.5% in constant currency. Excluding License and Support Revenue: $361 million, down 8.5% year over year and 5.5% in constant currency. Non-GAAP Operating Margin: 2.8% for the first quarter. Gross Profit: $108 million, with a gross margin of 24.9%. Adjusted EBITDA: $40 million, with a margin of 9.3%. Net Income: Negative $30 million, translating to a diluted loss of $0.42 per share. Adjusted Net Loss: $3 million, a diluted loss per share of $0.05. Pre-Pension Free Cash Flow: $23 million, up $11 million year over year. Cash Balances: $393 million as of March 31st. First Quarter New Business TCV: $337 million, up more than 50% sequentially and more than 80% year over year. Backlog: $2.9 billion, up 2% sequentially and 4% year over year. Digital Workplace Solutions Revenue: $119 million, down 7.5% year over year. Cloud Applications and Infrastructure Solutions Revenue: $177 million, down 3.3% year over year. Enterprise Computing Solutions Revenue: $119 million, down 11.2% year over year. Warning! GuruFocus has detected 2 Warning Signs with UIS. Release Date: May 01, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Unisys Corp (NYSE:UIS) achieved strong growth in new business total contract value (TCV), driven by sustained momentum in new logos. The company expects enhanced delivery and operational efficiencies to provide a path above the midpoint for profitability guidance. Unisys Corp (NYSE:UIS) has a significant pipeline of device subscription services (DSS) opportunities, with new contracts signed in the quarter. The company launched its first post-quantum cryptography solution, expanding its security portfolio. Unisys Corp (NYSE:UIS) was recognized as a leader in attack surface management and achieved titanium partner status with Dell, enhancing its market presence. First quarter revenue was down 11.4% year over year, primarily due to Ex-L&S renewal timing. The company's non-GAAP operating profit margin decreased to 2.8% from 7.1% in the prior period. There is ongoing macroeconomic and geopolitical uncertainty, including tariffs and trade restrictions, affecting client decision-making. The company experienced lower discretionary volumes in the Digital Workplace Solutions (DWS) and Cloud Applications & Infrastructure (CA&I) segments. Unisys Corp (NYSE:UIS) reported a net income loss of $30 million for the first quarter. Q: Can you elaborate on the factors driving the Ex-L&S revenue upside, and how much of it is due to improved volumes versus earlier than expected renewals? A: Mike Thomson, CEO and President, explained that the Ex-L&S volume has been consistently increasing due to data usage, repatriation in the market, and AI efforts requiring more data. This platform is a significant data source, leading to increased consumption. Additionally, there have been longer contract extensions, indicating a strong client commitment. The company is confident in the Ex-L&S ramp for the rest of the year, with growth and margin improvements expected as most revenue is embedded in the backlog. Q: What are the sequential growth assumptions for Ex-L&S and LNF in 2025? A: Mike Thomson stated that they expect sequential growth every quarter, with increases in Q2, Q3, and Q4. The growth is supported by backlog and pipeline visibility, with an uptick in field services volumes, particularly in higher-margin infrastructure work. The Ex-L&S component is expected to have a 35% front half and 65% back half split, with significant contracts in Q4 contributing to 2026 cash flow. Q: Are you positioned to benefit from AI-related data center build-outs and maintenance? A: Mike Thomson confirmed that Unisys is well-positioned to benefit from AI-related data center activities. The company has been investing in training and hiring in anticipation of revenue from OEM contracts signed last year. The enterprise storage work began in March and is expected to continue ramping up. Q: How confident are you in achieving your 2026 targets given the current macroeconomic uncertainties? A: Mike Thomson expressed confidence in meeting the 2026 targets, as outlined in their 2023 investor day. Despite some macroeconomic uncertainties, the company has not seen significant hesitation from customers, and the pipeline and backlog are growing, indicating strong demand for their solutions. Q: Are there any strategic changes under your leadership, and how do you assess the quality of your pipeline and backlog? A: Mike Thomson stated that the strategy remains consistent, focusing on market awareness, solution distinction, and associate development. The pipeline and backlog are strong, with no need for culling. The company has a rigorous qualification process, and the pipeline is more mature, indicating a higher likelihood of closing deals. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
