Unisys Combines Services, Enterprise Teams In Response To Revenue Drop

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Unisys has merged its services and enterprise solutions teams to cut costs and quicken decision-making within the company's services business, President and CEO Peter Altabef said Tuesday evening.

The move comes as the Blue Bell, Pa.-based IT firm, No. 20 on the CRN Solution Provider 500, saw its services segment revenues fall by a little more than 5 percent in the second quarter of its fiscal 2017.

"You have to get ahead of that decline in terms of your cost structure," Altabef said during the company's earnings call. "We did not get ahead of that decline in the quarter. It's as simple as that. By the time we really understood that, we made changes."

[Related: Unisys CEO: Our Federal Business Focus, Particularly Around Border Security, Aligns Well With The Trump Administration]

Unisys added that combining the two teams will better align revenues and costs, which should in part lead to a better financial performance during the rest of the year.

The company expressed confidence that year-over-year revenue and margin growth around ClearPath Forward Systems, its large-system infrastructure platform, should also contribute to a second-half services business rebound by eventually capturing a "stickier" client base.

Had Unisys better-handled the cost structure of its services segment, CFO Inder Singh said a higher margin outcome would've resulted in a year-over-year increase in services gross margin.

"We know what the things are and can manage through those. We expect that those things are controllable from a cost-saving standpoint," Singh said.

Among its other endeavors, Unisys said it plans to launch a solution that incorporates the company's software-defined portfolio, Stealth, into the adaptive security architecture technology of partner security firm LogRhythm.

"Federal agencies have shown significant interest," Altabef said.

Unisys revenues fell to $666.2 million in the quarter ended June 30, down 11 percent from last year's second-quarter mark of $748.9 million. That missed Seeking Alpha's revenue projection by $8.55 million.

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