Federal business drags down Unisys' growth rate

Unisys had strong ClearPath mainframe sales and system integration business, but the federal market continues to be a challenge.

Unisys Corp.’s revenue grew 6 percent to $1.02 billion in the third quarter of 2011, largely based on its operations outside the federal sector, the company said Oct. 24.

Excluding federal business, overall revenue grew 14 percent when compared to the third quarter of 2010.

Ed Coleman, chairman and CEO of Unisys, said the company increased its total revenue and its services revenue. Unisys had strong ClearPath mainframe sales, higher sales of industry solutions within its system integration business, and its non-federal IT outsourcing business.

Growth in these areas “more than offset a decline in our U.S. federal business where market conditions remain challenging,” Coleman said.

Unisys reported a third quarter gross profit margin of 27.9 percent, up from 24.7 percent in the same period last year. The improvement is primarily because of higher sales of ClearPath software and servers and a more profitable mix of services revenue, the company said.

Revenues from some of Unisys’ specific sectors had double-digit increases when excluding federal business. Services revenue grew 12 percent from the year-ago quarter. The increase was driven by both the seventh consecutive quarter of growth in IT outsourcing revenue and the growth in systems integration revenue in the quarter.

Third-quarter 2011 technology revenue grew 36 percent year-over-year as well.

The company’s services backlog as of Sept. 30 was $5.3 billion, a decrease of 8 percent from a year ago.

Third-quarter services orders showed a low double-digit, year-over-year decline in the quarter though. Unisys said it reflects lower outsourcing and fewer federal orders. Services orders increased slightly from the second quarter of 2011.

Unisys, of Blue Bell, Pa., ranks No. 40 on Washington Technology’s 2011 Top 100 list of the largest federal government contractors.