Unisys taking 1 step at a time to resurrect revenue growth and improve profitability
Unisys’ (NYSE: UIS) financial performance remained lumpy and unsatisfactory as the company reported its 11th consecutive services revenue decline, at 6.4% year-to-year in 2Q17. The company experienced ongoing challenges across all services segments, with notable revenue declines in application services as well as cloud and infrastructure services, which collectively accounted for 91% of services revenues in 2Q17. While Unisys is realigning its go-to-market approach and organization to provide vertical- and IP-led solutions and integrating security into everything the company offers to clients, the initiatives have yet to generate results for the company. Ongoing restructuring, accelerated initiatives around expanding next-generation solution sales, and increased hiring, such as of subject matter experts and consultants, continue to offset the benefits from shifting its business mix toward higher-margin offerings such as its software-enhanced solutions. Augmenting its consulting capabilities to drive transformational engagements and increase value for clients is a paradigm shift for Unisys, and will help drive engagement and build trust with clients; however, the company has a long way to go to catch up with established consulting-led peers. Monetizing the ClearPath Forward and Stealth solutions and IP-led vertical solutions, such as Digital Investigator for the law enforcement sector, Digistics for the air cargo segment and Elevate for the banking sector, will be critical as Unisys continues to rebuild to return to revenue growth and profitability.