What: Shares of IT services specialist Unisys were down nearly 15% as of 2:45 p.m. Friday after its quarterly results missed Wall Street estimates.
So what: Unisys shares have plummeted over the past several months on a string of disappointing quarters, and yesterday's Q2 results -- loss of $52 million on a revenue drop of 5% -- suggest that downtrend isn't slowing anytime soon. While the top-line decline was mainly due to unfavorable forex rates, the loss, nevertheless, marks the sixth consecutive quarter in which Unisys has posted red numbers. Gross margins during the quarter even declined a whopping 420 basis points over the year-ago period, reinforcing worries about the company's competitive position and cost structure going forward.
Now what: Management remains optimistic about its growth opportunities going forward. "We were pleased to see solid revenue growth on a constant currency basis during the quarter," said Unisys President and CEO Peter Altabef. "We are aggressively implementing our new operating model to be a more nimble, focused and responsive company that anticipates and rapidly responds to market opportunities globally." With the stock now off more than 40% from its 52-week highs and trading at a paltry price-to-sales of about 0.3, Unisys' long-term upside -- particularly within cloud service -- might be worth taking a shot on.
The article Why Unisys Shares Crashed 15% Today originally appeared on Fool.com.
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