Unisys crushed after Q2 miss; mainframe weakness blamed

"Our second-quarter 2014 results were impacted by lower sales of our flagship ClearPath family of enterprise software and servers, which can vary significantly from quarter to quarter based on the timing of client transactions," says Unisys (UIS -17.8%) CEO Ed Coleman.

The weakness led Unisys' technology revenue to fall 21% Y/Y to $93.5M. Services revenue fell 4% to $712.9M.

The company promises technology sales will improve in 2H14, aided by new Intel-based ClearPath mainframes launched in June. Nonetheless, Coleman guided on the CC (transcript) for 2014 technology revenue of $470M-$500M vs. a prior outlook of $500M.

He added Unisys continues to "make adjustments to our portfolio, our go-to-market approach and our cost structure" for its services ops. An industry shift away from multi-year systems integration projects to short-term deals is impacting sales. Full-year services revenue is expected to fall by a low-single digit percentage.

The company's Edge cloud-based IT service management platform is a bright spot: Total clients have passed 160, and Chinese demand has picked up thanks to a partnership with 21Vianet.

Q2 results, PR

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