Unisys Corp., a Blue Bell seller of computers and technology-consulting services, yesterday reported its first profit in more than two years after moving jobs to cheaper countries such as India.
Fourth-quarter net income was $21.3 million, or 6 cents a share, compared with a net loss of $31.1 million, or 9 cents a share, a year earlier, the company said.
Sales fell 1.1 percent to $1.55 billion.
The company also updated the status of its job cutbacks:
The total reduction planned is 5,600 positions.
Of the total, 4,900 were completed in 2006.
The remainder will be finished by the end of June.
The company will save $280 million this year from the 2006 job cuts. The total 2007 savings, including the cuts still to be made, will be about $340 million on an annualized basis.
The reductions so far amount to more than 10 percent of its workforce as it moved production to India. The average wage for programmers there is about an eighth of what those in the United States make, according to consultant NeoIT Inc. Unisys has sought to improve profit margins to compete with larger rivals such as International Business Machines Corp.
"The company made a lot of progress in reducing costs," said Jamie Friedman, a Susquehanna International Group L.L.P. analyst in New York. "The competitive landscape for domestic computer services is brutal, and it's hard to remain competitive" without moving work to cheaper countries.
The company expects "modest" sales growth in the next few years, chief executive officer Joe McGrath said in a conference call yesterday.
Unisys' shares fell 9 cents, to $8.16, in New York Stock Exchange composite trading. The stock had advanced 32 percent in the last year before yesterday.
Unisys' goal is to achieve 2008 profit before interest and taxes equal to 8 percent to 10 percent of sales, excluding pension and retirement-related costs.
Profit on that basis, excluding restructuring costs, rose to $102 million, or 6.6 percent of sales, from $80.9 million, or 5.2 percent, a year earlier.
For Unisys' full fourth-quarter and year-end financial report, go to http://go.philly.com/Unisys4Q