A Look at Unisys’ Earnings and Risk Factors

Pennsylvania-based Unisys (UIS) provides IT solutions. It has a global footprint and serves governments and corporations. Let take a look at the company’s latest financial performance and risk factors.

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Unisys’ Q2 Financial Results

The company reported a 17.9% year-over-year increase in revenue to $517.3 million for the second quarter. Revenue exceeded consensus estimates of $485.57 million. The company reported adjusted EPS of $0.68 compared to a loss per share of $0.15 a year ago and beat EPS estimates of $0.33. (See Unisys stock charts on TipRanks).

Unisys’ Risk Factors

The new TipRanks Risk Factors tool shows 30 risk factors for Unisys. Since December 2020, the company has updated its risk profile to introduce five new risk factors.

Unisys tells investors that executing its business strategy depends on its ability to attract top talent and retain significant clients. The company cautions that its contracts may not generate the expected level of revenue or be as profitable as anticipated.

Although Unisys managed to reduce its gross pension liability by $1.2 billion in Q2, it tells investors that it has significant unfunded pension obligations. The company also says its ability to apply operating loss carryforwards to reduce future tax liabilities may be limited.

Further, Unisys warns that its reputation may be damaged, or it may face legal liability if clients are not satisfied with the solutions it offers.

Finance and Corporate is Unisys’ top risk category, accounting for 20% of the total risks. That is below the sector average at 39%. Unisys’ shares have gained about 23% since the beginning of 2021.

Analysts’ Take

In August, Canaccord Genuity analyst Joseph Vafi upgraded Unisys stock rating to a Buy from a Hold without assigning a price target.

Consensus among analysts is a Moderate Buy based on 2 Buys. The average Unisys price target of $35 implies 44.57% upside potential to current levels.