"We need to reduce expenses and get ourselves into lean fighting shape," says new Unisys ceo Ed Coleman, former head of Gateway Computers, in a conference call with investors this morning. "We must simplify our organization and reduce our expense structure."
"We are taking actions to reduce spending in the fourth quarter, particularly SG&A" (sales, general and administrative expenses), said cfo Janet Haugen. "It's starting already." Later, she added, "The first area we're going after is discretionary spend. It's not employee-related. As of right now we have no plans for a large restructuring charge." Link to conference call here.
What does that mean for the company's headquarters move to Philadelphia's Liberty Place complex, proposed by Coleman's predecessor, Joseph McGrath? "That decision hasn't been made," said spokesman Jim Kerr. Neighbors complained they didn't want Unisys putting its sign on the blue-glass and gray-stone tower. Sounds like it's on hold.
The company lost $35 million, as slower federal Homeland Security and Transportation spending and less outsourcing by financial-service companies hurt sales. Revenues dropped to around $1.3 billion for the three months ended Sept. 30, from nearly $1.4 billion a year earlier. Unisys won't make its projected 8 to 10 percent profit margin next year, Haugen said. Earnings release here.