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UNISYS REPORTS INCREASE IN THIRD QUARTER EARNINGS

 BLUE BELL, Pa., Oct. 19 /PRNewswire/ -- Unisys Corporation (NYSE: UIS) today reported net income of $84.1 million or 29 cents per fully diluted share for the third quarter ended September 30, 1993, compared to $68.3 million or 23 cents per share a year ago.
 Excluding the positive effect of one-time tax items in each year, earnings per share in the quarter were 20 cents versus 17 cents a year ago. Revenue was $1.81 billion compared to $2.07 billion in the year- ago quarter. Approximately 35 percent of the revenue decline was due to the impact of negative currency translation.
 Unisys Chairman and Chief Executive Officer James A. Unruh said, "Cost reductions taken throughout the past two years have produced continued profitability improvement during an extended period of global economic weakness. We were able to improve earnings per share 18 percent in the quarter, excluding gains from tax items, despite significant deterioration in the European marketplace and continued weakness in Japan. During two years of turmoil in our industry, Unisys has delivered eight profitable quarters. We are confident that investments being made in new services and products, together with the new organization structure announced in August will, over time, result in the generation of profitable revenue growth. Revenue and profit growth in our U.S. commercial business over the past year, as the market has slowly improved, suggests that given a faster, broader global recovery, we clearly have the strategy, products and services to benefit from stronger markets. But short term, profit and cash flow will be driven first by our streamlined cost structure."
 Unisys said cash flow from operations was $119 million and total debt was reduced $131 million. Financial progress led to a credit rating upgrade from Standard & Poor's in the quarter.
 The company said orders showed strong growth in the U.S. commercial business, the Pacific Rim excluding Japan, and Latin America, but were more than offset by substantial declines in the European commercial business as well as in the U.S. defense business.
 The company said it was pleased that revenue and orders for information services and systems integration, one of its strategic growth businesses, were strong in the quarter. However, revenue for the client/server business declined and is below our expectations through nine months. UNIX system business was affected in part by a product technology transition. The new U6000/300, Pentium-based UNIX server began shipping at the end of the quarter, along with the Intel 486-based U6000/DT desktop and U6000/100 server products. Additional Pentium-based PC, UNIX and CTOS products, as well as advanced "486" client/server products, will be announced and shipped in the fourth quarter. The client/server unit should also benefit over time from an "integrated business unit" structure announced in August to drive growth for this strategic business.
 Unruh said, "We are pleased by continued profitability and debt reduction progress in these difficult times. We are equally encouraged by progress in the quarter in implementing major customer, technology and services initiatives. Customer satisfaction levels are continuing to rise according to our latest survey. Analysts have claimed an industry-leading position for our new CMOS-based 2200/500 enterprise server technology. Analysts have been equally positive about the extended alliance with Intel to develop "scalable parallel processing" systems for commercial markets. And programs to expand our information services capabilities are on track.
 "What does concern us is the economic weakness in some major markets outside the U.S. Deterioration in our European business accelerated in the quarter and Japan continues to be weak, offsetting growth in other parts of our business. It is difficult to predict the timing of economic recovery in these international markets. We will continue to reduce costs during this period of economic weakness to position the company to benefit from an economic recovery," Unruh said.
 For the nine months ended September 30, 1993, net income was $447.7 million or $1.83 per share. The nine-month period included a net gain from one-time items in the first quarter of $203.8 million or 83 cents per fully diluted share. In the nine-month period one year ago, net income was $222.0 million or 79 cents per common share including $27.0 million or 16 cents per share from the tax benefit of operating loss carry-forwards. Revenue was $5.64 billion compared to $6.17 billion for the first nine months of 1992.
 UNISYS CORPORATION
 CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
 (Millions, except per share data)
 Three Months Nine Months
 Ended Sept. 30 Ended Sept. 30
 1993 1992 1993 1992
 Revenue:
 Net sales $1,126.6 $1,328.8 $3,605.3 $4,011.3
 Services 680.1 738.7 2,036.1 2,154.2
 Total 1,806.7 2,067.5 5,641.4 6,165.5
 Costs and expenses
 Cost of net sales 690.8 834.3 2,181.7 2,539.5
 Cost of services 453.0 494.3 1,355.6 1,434.0
 Selling, general and
 administrative 398.6 443.9 1,215.3 1,303.3
 Research and development 129.0 129.7 383.4 396.3
 Total 1,671.4 1,902.2 5,136.0 5,673.1
 Operating income 135.3 165.3 505.4 492.4
 Interest expense 55.2 89.6 187.0 253.6
 Other income, net 15.3 10.2 12.0 48.0
 Income before income taxes 95.4 85.9 330.4 286.8
 Estimated income taxes 11.3 27.6 86.5 91.8
 Income before changes in
 accounting principles and
 extraordinary items 84.1 58.3 243.9 195.0
 Effect of changes in
 accounting principles -- -- 230.2 --
 Extraordinary items 10.0 (26.4) 27.0
 Net income 84.1 68.3 447.7 222.0
 Dividends on preferred
 shares 30.3 30.6 91.3 91.6
 Earnings on common shares $53.8 $37.7 $356.4 $130.4
 Earnings per common share:
 Primary:
 Before changes in accounting
 accounting principles
 and extraordinary items $0.33 $0.17 $0.93 $0.63
 Effect of changes in
 accounting principles -- -- 1.39 --
 Extraordinary items 0.06 (0.16) 0.17
 Total $0.33 $0.23 $2.16 $0.80
 Fully diluted:
 Before changes in accounting
 accounting principles
 and extraordinary items $0.29 $0.17 $1.00 $0.63
 Effect of changes in
 accounting principles 0.94
 Extraordinary items 0.06 (0.11) 0.16
 Total $0.29 $0.23 $1.83 $0.79
 Shares used in the per share
 computations (thousands):
 Primary 164,945 163,816 164,950 163,705
 Fully diluted 198,871 197,516 246,466 176,491
 Certain prior year amounts have been reclassified to conform with the current year presentation.
 UNISYS CORPORATION
 CONSOLIDATED BALANCE SHEET
 (Millions)
 Sept. 30 Dec. 31
 1993 1992
 (Unaudited) (Audited)
 Assets:
 Current assets:
 Cash and cash equivalents $613.6 $809.1
 Marketable securities 25.1 73.7
 Accounts and notes receivable, net 1,010.8 1,326.3
 Inventories
 Finished equipment and supplies 365.6 446.9
 Work in process and raw materials 450.9 426.9
 Deferred income taxes 308.6 433.0
 Other current assets 106.9 114.8
 Total 2,881.5 3,630.7
 Long-term receivables, net 112.7 205.4
 Properties and rental equipment 2,846.9 3,075.6
 Less accumulated depreciation 1,859.1 1,949.9
 Properties and rental equipment, net 987.8 1,125.7
 Cost in excess of net assets acquired 1,194.2 1,225.2
 Investments at equity 300.1 283.9
 Deferred income taxes 762.4
 Other assets 1,128.0 1,077.8
 Total $7,366.7 $7,548.7
 Liabilities and stockholders' equity:
 Current liabilities:
 Notes payable $31.8 $53.2
 Current maturities of long-term debt 10.4 283.1
 Accounts payable 893.6 1,058.0
 Other accrued liabilities 905.8 1,213.1
 Dividends payable 45.7 46.1
 Estimated income taxes 416.8 330.9
 Total 2,304.1 2,984.4
 Long-term debt 2,056.2 2,172.8
 Other liabilities 483.5 147.4
 Stockholders' equity
 Preferred stock 1,570.5 1,578.0
 Common stock 1.6 1.6
 Retained earnings (accumulated deficit) 82.1 (228.0)
 Other capital 868.7 892.5
 Stockholders' equity 2,522.9 2,244.1
 Total $7,366.7 $7,548.7
 Certain prior year amounts have been reclassified to conform with the current year presentation.
 UNISYS CORPORATION
 CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
 (Millions)
 Nine Months Ended
 Sept. 30
 1993 1992
 Cash flows from operating activities
 Net income $447.7 $222.0
 Add (deduct) items to reconcile net income
 to net cash provided by operating
 activities:
 Effect of changes in accounting principles
 and extraordinary items (203.8) (27.0)
 Depreciation 221.1 278.0
 Amortization:
 Marketable software 105.3 97.6
 Cost in excess of net assets acquired 31.0 31.0
 (Increase) in deferred income taxes, net (23.3)
 Decrease in receivables, net 385.9 396.6
 Decrease in inventories 57.3 74.9
 (Decrease) in accounts payable and other
 current liabilities (565.4) (399.9)
 Increase in estimated income taxes 11.6 9.4
 (Decrease) in other liabilities (10.0) (12.3)
 Decrease (increase) in other assets 47.0 (138.6)
 Other 26.4 87.9
 Net cash provided by operating activities 530.8 619.6
 Cash flows from investing activities
 Proceeds from investments 1,497.3 1,580.2
 Purchases of investments (1,498.1) (1,545.8)
 Proceeds from marketable securities 122.3
 Purchases of marketable securities (72.7)
 Proceeds from sales of properties 18.3 75.3
 Investment in marketable software (81.0) (79.3)
 Capital additions of properties and
 rental equipment (149.4) (164.9)
 Net cash used for investing activities (163.3) (134.5)
 Cash flows from financing activities
 Proceeds from issuance of debt 973.6
 Principal payments of debt (379.2) (288.4)
 Net reduction in short-term borrowings (21.4) (866.3)
 Dividends paid on preferred shares (138.0)
 Other 5.6 1.3
 Net cash used for financing activities (533.0) (179.8)
 Effect of exchange rate changes on
 cash and cash equivalents (30.0) (6.7)
 (Decrease) increase in cash and
 cash equivalents (195.5) 298.6
 Cash and cash equivalents, beginning
 of period 809.1 813.6
 Cash and cash equivalents, end of period $613.6 $1,112.2
 Certain prior year amounts have been reclassified to conform with the current year presentation.
 /delval/
 -0- 10/19/93
 /CONTACT: J. Peter Hynes of Unisys, 215-986-6948/
 (UIS)


CO: Unisys Corporation ST: Pennsylvania IN: CPR SU: ERN

LJ -- PH005 -- 3735 10/19/93 08:13 EDT
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