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Shares of old-guard tech firm Unisys (UIS) are jumping Tuesday morning, rising 11 cents, or 6.4%, to $1.83, after the company reported Q2 sales fell 16%, year over year, to $1.13 billion, consistent with a July 13 pre-announcement and ahead of the two estimates on the Street. But the company also reported a surprise profit per share of 10 cents versus expectations of a 1-cent-per-share loss.

Excluding the effect of foreign exchange, revenue would have declined only 8%, the company said.

The biggest source of outperformance on the bottom line was a 33% drop in SG&A expenses.

Gross profit increased year over year to 23.9% of sales from 22.7%. The company’s sales to government in the U.S. helped offset commercial declines, and overall U.S. sales were only down 5% versus a 24% decline overseas.

On a conference call with analysts, Unisys CEO Ed Coleman remarked that the company was making progress on a turnaround program outlined two quarters ago, delivering net income and reducing the company’s use of free cash to “almost breakeven levels.” He said commercial spending in the states was “soft” but that the company continues to benefit from government spend on things such as security technology.

Also on the call, the company said it successfully exchanged $230 million of $300 million of unsecured debt due next year for common stock and secured debt. The company also exchanged $290 million of $400 million worth of unsecured debt due 2012. Unisys had $760 million of long-term debt at the end of the quarter.

The company ended the quarter with $475 million of cash and equivalents, and expects to use $200 million to $225 million for capex in all of 2009, management said.

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Source: Unisys Q2 Surprise Profit