Unisys Thrives On Government SalesUnisys Thrives On Government Sales

Strong sales of IT products and services to the federal government helped Unisys Corp. achieve moderate sales growth and a jump in earnings for the second quarter.

For the three months ended June 30, revenue grew to $1.43 billion, up 5% from $1.36 billion a year ago, the hardware and services company said Thursday. Net income was $52.5 million, or 16 cents per share, compared with income of $42.2 million, or 13 cents per share, a year earlier--a 23% gain on a per-share basis.

Unisys' growth came during a period that company chairman and CEO Lawrence Wienbach described in a statement as continuing to feature a "tough IT spending environment."

Revenue in the United States increased 12% to $668 million, driven primarily by strong sales to the federal government, according to the company. Unisys isn't alone in enjoying a boost from the public sector. A number of major vendors recently have reported similarly strong growth in government sales as the Bush administration continues to privatize many federal IT operations. Unisys' international sales fell 1% to $757 million, mostly because of weakness in the European and Latin American markets.

Services revenue jumped 12% year over year as Unisys posted double-digit gains in its outsourcing and systems integration businesses. However, the company's technology sales fell 18%. On the hardware side, Unisys saw sales of its Intel-based ES7000 servers increase by double digits, while sales of its Clearpath mainframe systems fell by the same margin.

The company said it expects "modest" revenue growth in the third quarter and remains comfortable with its full-year earnings outlook of 77 to 82 cents per share.