Unisys Issues Profit Warning; Shares Plunge

Unisys Corp. shares tumbled 36%, their biggest drop ever, after the Blue Bell, Pa.-based computer maker and services company said second-quarter profit would miss already-reduced estimates because mainframe sales fell. In the third warning in nine months, Unisys said it will report profit of 18 cents to 20 cents a share before a charge, down from 37 cents a year ago. Revenue was $1.62 billion to $1.65 billion, as much as 15% less than last year. Customers put off buying computers, dealing another setback to Chief Executive Larry Weinbach, whom investors had credited with focusing the struggling mainframe maker on faster-growing services and slashing $1.7 billion in debt since he took over in 1997. Unisys shares fell $8.38 to close at $14.75 on the New York Stock Exchange. The stock has lost 54% of its value this year, after doubling in both 1997 and 1998 and trading as high as $49.31 on Sept. 20.