Unisys Corp (NYSE:UIS)

bad sign... starting to experience drops in revenue

Here is my summary take on UIS.

Despite 10-15 years of "transformation" from a technology firm to a services firm, UIS is not a growing enterprise. A revolving door series of senior managers, following to a failing group of old-line managers, has succeeded in managing financial re-engineering but failed miserably in creating a growth engine. One can debate the skills/merits of many of these leaders. However, their efforts have to be set against a backdrop of an industry in transition, consolidation and firms of much greater scale: not to mention imploding margins. That game is not over.

ClearPath, the long-time engine of profits is slowly eroding. Management's best case is to maintain the revenue level. Margins will continue to fall as eventually more attractive platforms will become a necessity. Do not forget that, despite many great improvements in its "openness", legacy skills are required to maintain CP. Cloud computing both helps CP and harms it since users really do not care what the platform is. CC allows CP to sustain itself as the hub of a cloud, but the overwhelming alternative offerings will take their toll.

The current solution portfolio is balkanized with no significant drivers to leverage for growth. Outsourcing is increasingly becoming a commodity.

If there is a future quantum leap for UIS, it will be based upon the ability of "someone" to combine the positive cash flow with a roll of the dice to do something different. Maybe something really different. The current solution portfolio is balkanized with no significant drivers to leverage for growth.Visionary leaders are rare in business. It means letting go of one ring before you grasp the next!