Unisys Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Business-information-technology specialist Unisys (NYSE: UIS  ) saw its shares plunge a nasty 20% in early Tuesday trading after posting lower-than-expected quarterly results.

So what: After three consecutive quarters of solid growth, the decline in demand for Unisys' ClearPath servers seems to have caught investors off guard. The company's third-quarter profit fell 54% to $28.3 million, or $0.65 a share, which was well below the average analyst estimate of $0.86 a share.

Now what: Being greedy when others are fearful is often the most profitable thing to do, but now simply isn't the time to do it. While Unisys has made some decent cost-cutting strides over the past few years, a lack of differentiation and continuing top-line declines remain big concerns for shareholders. With blue-chip consulting foes such as Accenture (NYSE: ACN  ) , IBM (NYSE: IBM  ) , and Hewlett-Packard (NYSE: HPQ  ) available at reasonable prices, taking a turnaround bet on Unisys just doesn't seem worth it.

Interested in more info on Unisys? Add it to your watchlist by clicking here.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Accenture is a Motley Fool Inside Value pick. The Fool owns shares of IBM. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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