Interim Results

Interim Results 

    BLUE BELL, Pa.--(BUSINESS WIRE)--July 17, 2003--

      Unisys Reports 23% Growth in Earnings Per Share and Strong
                  Cash Flow in Second Quarter of 2003
       Company Meets Financial Targets for Quarter and Reaffirms
                  Earnings Outlook for Full-Year 2003

Unisys Corporation (NYSE:UIS) today reported 23% year-over-year growth
in its second-quarter 2003 earnings per share, within its targeted EPS
range for the quarter. Unisys also reported second-quarter 2003
revenue growth and strong cash flow from operations, as the company
continues to benefit from its end-to-end, value-added business
strategy.

Unisys reported second-quarter 2003 net income of $52.5 million, or 16
cents per share, compared to net income of $42.2 million, or 13 cents
per share, in the second quarter of 2002. Revenue for the second
quarter of 2003 increased 5% to $1.43 billion from revenue of $1.36
billion in the year-ago quarter. Currency had a 4 percentage-point
positive impact on the company's revenue in the second quarter, as the
U.S. dollar weakened against most major currencies worldwide.

Comments from Chairman and CEO Larry Weinbach

'We continue to execute in a tough IT spending environment,' said
Unisys Chairman and CEO Lawrence A. Weinbach. 'By staying focused on
our value-added strategy and being highly selective in the
opportunities we pursue, we continued our consistent financial
performance and met our financial targets for the quarter. We achieved
this earnings growth despite significantly lower pension income, which
declined to $8 million in the quarter from $34 million in the year-ago
period.

'I was particularly pleased with the performance of our services
business, where revenue grew 12% in the quarter and where we have made
good progress in our three key priority areas of outsourcing,
consulting and systems integration, and security services. Our
outsourcing business showed continued strong double-digit growth as we
benefit from our expanding client base and the rollout of recent large
contract wins, including our work with the U.S. Transportation
Security Administration. We also saw growth in consulting and systems
integration, and enterprise security solutions.

'We also continue to make progress against the key growth objective in
our technology business -- namely, to increase sales and market share
in our high-end, Intel-based ES7000 servers,' Weinbach said. 'While
the technology market remains weak overall, our ES7000 server revenue
grew more than 50% in the quarter from year-ago levels. This was our
fourth consecutive quarter of year-over-year double-digit sales growth
for the ES7000 line, demonstrating our building momentum in this
emerging market. We are steadily building our base of satisfied ES7000
users around the world, many of whom are purchasing follow-on systems
and placing multi-unit orders.'

In the second quarter, Unisys announced a range of new services and
products that expand its offerings in its strategic growth areas. In
the services business, Unisys announced its Business Blueprinting
initiative, which is designed to help clients create digital roadmaps
for their organizations in order to improve their flexibility, reduce
system development time, and eliminate unnecessary costs. Unisys also
continued to expand its enterprise security solutions, including the
introduction of a new suite of identity management solutions for
Microsoft Windows-based environments. In its technology business, the
company launched its ES7000/400 line of servers, a major expansion of
the ES7000 family based on Intel's new 64-bit Itanium 2 processors.

Overall Company Highlights

Unisys said total worldwide orders showed single-digit gains in the
second quarter. Double-digit gains in services orders offset order
declines for technology products. U.S. orders, led by the U.S. Federal
government sector, showed strong double-digit growth, while
international orders experienced double-digit declines.

U.S. revenue grew 12% in the second quarter to $668 million compared
to $595 million in the year-ago period. U.S. revenue growth in the
quarter was driven primarily by growth in the company's U.S. Federal
government business. Revenue in international markets declined 1% to
$757 million from $765 million a year ago. On a constant currency
basis, revenue in international markets declined 9% in the quarter.

Unisys reported an overall second-quarter 2003 gross profit margin of
27.5% compared to 29.7% in the year-ago period. Operating profit
margins declined to 6.0% from 7.1% in the year-ago quarter. The
decline in the company's profit margins in the quarter primarily
reflected significantly lower pension income compared to the year-ago
quarter.

Selling, general, and administrative (SG&A) expenses declined slightly
from second-quarter 2002 levels. SG&A expenses represented 17.0% of
revenue in the second quarter of 2003 compared to 18.1% of revenue in
the year-ago quarter.

Business Segment Highlights

Customer revenue in the company's services business grew 12% in the
second quarter. Unisys reported double-digit growth in outsourcing and
in systems integration and consulting, and a slight decline in
infrastructure services. Primarily reflecting the lower levels of
pension income, gross profit margins in the services business declined
1.9 percentage points from year-ago levels to 20.0%, and services
operating margins declined .3 percentage points from a year ago to
5.5%.

Customer revenue in the company's technology business declined 18% in
the second quarter, reflecting continued weak conditions in the
technology market, particularly in Europe and Latin America. Within
enterprise servers, sales of Intel-based ES7000 servers showed
substantial growth over year-ago levels, while ClearPath system sales
showed double-digit declines. Gross margins in the technology business
declined slightly from year-ago levels to 46.6%. Technology operating
margins decreased 4.4 percentage points from a year ago to 7.8%,
reflecting lower volume and the impact of lower pension income in the
quarter.

Cash Flow and Balance Sheet Highlights

Unisys generated $113 million of cash flow from operations in the
second quarter compared to $3 million in the year-ago quarter. The
improvement in cash flow from operations primarily reflected the
company's continued focus on working capital, including higher levels
of customer prepayments. Cash expenditures for prior restructuring
actions were $14 million in the second quarter of 2003 compared to $28
million in the year-ago quarter.

Capital expenditures in the second quarter of 2003 were $100 million,
including $77 million invested in revenue-generating projects. This
compared to capital expenditures of $102 million, including $79
million for revenue-generating projects, in the year-ago quarter. The
company had $382 million of cash on hand at June 30, 2003.

On July 1, 2003 Unisys finalized a new three-year unsecured credit
agreement that replaced a $450 million three-year facility due to
expire in March 2004. The new facility is supported by 15 U.S. and
international banks and provides an increased commitment to $500
million, with terms similar to the previous agreement. The new
facility will be used to support the company's ongoing operating and
working capital needs.

Year-to-Date Results

For the six months ended June 30, 2003, Unisys reported net income of
$91.0 million, or 28 cents per share, compared to first-half 2002 net
income of $74.9 million, or 23 cents per share. Revenue for the first
six months of 2003 was $2.82 billion compared to revenue of $2.72
billion in the first half of 2002.

Business Outlook

'With half the year behind us, we are on track to achieve our
strategic and financial objectives for 2003,' Weinbach said. 'While
the global business environment remains challenging, we are growing
our revenue and earnings and steadily improving the profitability of
our underlying operations. As we enter the third quarter and the
vacation season, we expect to see the usual seasonal weakness in
technology sales, particularly in Europe. Still, with our existing
backlog and a significant pipeline of potential services business, we
believe we can achieve earnings per share in the 15 - 20 cents range
on modest revenue growth in the third quarter. We continue to look for
a strong fourth-quarter close, and we remain comfortable with our
previous expectation for full-year 2003 earnings per share in the 77 -
82 cents range.'

Conference Call

Unisys will hold a conference call today at 8:15 a.m. Eastern Time to
discuss its results. The listen-only Webcast, as well as the
accompanying presentation materials, can be accessed via a link on the
Unisys Investor Web site at www.unisys.com/investor. Following the
call, an audio replay of the Webcast, and accompanying presentation
materials, can be accessed through the same link.

About Unisys

Unisys is a worldwide information technology services and solutions
company. Our people combine expertise in systems integration,
outsourcing, infrastructure, server technology and consulting with
precision thinking and relentless execution to help clients, in more
than 100 countries, quickly and efficiently achieve competitive
advantage. For more information, visit www.unisys.com

Forward-Looking Statements

Any statements contained in this release that are not historical facts
are forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995. All forward-looking statements rely on
assumptions and are subject to various risks and uncertainties that
could cause actual results to differ materially from expectations. The
factors that could affect the company's future financial results are
discussed more fully in the company's periodic reports as filed with
the Securities and Exchange Commission.

RELEASE NO.: 0703/8319 (See accompanying financial information)
http://www.unisys.com/about__unisys/news_a_events/07178319.htm

Unisys is a registered trademark of Unisys Corporation. All other
brands and products referenced herein are acknowledged to be
trademarks or registered trademarks of their respective holders.


                        UNISYS CORPORATION
                 CONSOLIDATED STATEMENTS OF INCOME
                 (Millions, except per share data)

                           Three Months          Six Months
                           Ended June 30        Ended June 30
                        ------------------   ------------------
                           2003      2002       2003      2002
                         --------  --------   --------  --------
Revenue
  Services               $1,163.4  $1,039.3   $2,270.4  $2,088.5
  Technology                261.6     320.5      553.5     633.8
                         --------  --------   --------  --------
                          1,425.0   1,359.8    2,823.9   2,722.3
Costs and expenses
  Cost of revenue:
    Services                906.8     793.1    1,789.3   1,595.5
    Technology              126.1     162.2      255.4     333.0
                         --------  --------   --------  --------
                          1,032.9     955.3    2,044.7   1,928.5
  Selling, general and
    administrative          242.4     245.5      486.1     490.9
  Research and development   63.7      62.0      130.5     127.1
                         --------  --------   --------  --------
                          1,339.0   1,262.8    2,661.3   2,546.5
                         --------  --------   --------  --------
Operating income             86.0      97.0      162.6     175.8

Interest expense             18.4      18.1       34.1      35.6
Other income
 (expense), net              10.6     (16.0)       7.2     (28.4)
                         --------  --------   --------  --------
Income before income taxes   78.2      62.9      135.7     111.8
Provision for income taxes   25.7      20.7       44.7      36.9
                         --------  --------   --------  --------
Net income                  $52.5     $42.2      $91.0     $74.9
                         ========  ========   ========  ========
Earnings per share
Basic                      $  .16    $  .13     $  .28    $  .23
                         ========  ========   ========  ========
Diluted                    $  .16    $  .13     $  .28    $  .23
                         ========  ========   ========  ========
Shares used in the per share
  computations (thousands):
  Basic                   328,783   322,832    327,996   322,150
                         ========  ========   ========  ========
  Diluted                 331,149   324,262    329,987   323,785
                         ========  ========   ========  ========




                        UNISYS CORPORATION
                          SEGMENT RESULTS
                             (Millions)

                                 Elimi-
                       Total     nations    Services  Technology
                      --------   --------   --------  ----------
Three Months Ended
June 30, 2003
-----------------
Customer revenue      $1,425.0              $1,163.4      $261.6
Intersegment                       ($89.2)       6.3        82.9
                      --------   --------   --------    --------
Total revenue         $1,425.0     ($89.2)  $1,169.7      $344.5
                      ========   ========   ========    ========

Gross profit percent     27.5%                 20.0%       46.6%
                      ========              ========    ========
Operating profit
  percent                 6.0%                  5.5%        7.8%
                      ========              ========    ========
Three Months Ended
June 30, 2002
-----------------
Customer revenue      $1,359.8              $1,039.3      $320.5
Intersegment                       ($82.9)      14.2        68.7
                      --------   --------   --------    --------
Total revenue         $1,359.8     ($82.9)  $1,053.5      $389.2
                      ========   ========   ========    ========

Gross profit percent     29.7%                 21.9%       46.8%
                      ========              ========    ========
Operating profit
  percent                 7.1%                  5.8%       12.2%
                      ========              ========    ========

Six Months Ended
June 30, 2003
-----------------
Customer revenue      $2,823.9              $2,270.4      $553.5
Intersegment                      ($159.2)      11.9       147.3
                      --------   --------   --------    --------
Total revenue         $2,823.9    ($159.2)  $2,282.3      $700.8
                      ========   ========   ========    ========

Gross profit percent     27.6%                 19.4%       48.3%
                      ========              ========    ========
Operating profit
  percent                 5.8%                  4.3%        9.5%
                      ========              ========    ========
Six Months Ended
June 30, 2002
-----------------
Customer revenue      $2,722.3              $2,088.5      $633.8
Intersegment                      ($163.6)      25.7       137.9
                      --------   --------   --------    --------
Total revenue         $2,722.3    ($163.6)  $2,114.2      $771.7
                      ========   ========   ========    ========

Gross profit percent     29.2%                 21.8%       44.7%
                      ========              ========    ========
Operating profit
  percent                 6.5%                  5.4%       10.0%
                      ========              ========    ========



                        UNISYS CORPORATION
                   CONSOLIDATED BALANCE SHEETS
                            (Millions)

                                         June 30,   December 31,
                                           2003         2002
                                        ----------   ----------
Assets
Current assets
 Cash and cash equivalents                  $381.8       $301.8
 Accounts and notes receivable, net          957.9        955.6
 Inventories
   Parts and finished equipment              144.7        165.3
   Work in process and materials             128.6        127.5
 Deferred income taxes                       312.8        311.3
 Other current assets                         94.6         84.5
                                        ----------   ----------
 Total                                     2,020.4      1,946.0
                                        ----------   ----------
Properties                                 1,663.9      1,542.7
 Less accumulated depreciation
   and amortization                        1,004.8        932.9
                                        ----------   ----------
 Properties, net                             659.1        609.8
                                        ----------   ----------
Investments at equity                        125.6        111.8
Marketable software, net                     328.8        311.8
Deferred income taxes                      1,476.0      1,476.0
Goodwill                                     165.1        160.6
Other long-term assets                       379.8        365.4
                                        ----------   ----------
 Total                                    $5,154.8     $4,981.4
                                        ==========   ==========

Liabilities and stockholders' equity
Current liabilities
 Notes payable                               $17.7        $77.3
 Current maturities of long-term debt          2.2          4.4
 Accounts payable                            472.9        532.5
 Other accrued liabilities                 1,195.1      1,341.4
 Income taxes payable                        246.4        228.9
                                        ----------   ----------
 Total                                     1,934.3      2,184.5
                                        ----------   ----------
Long-term debt                             1,046.7        748.0
Accrued pension liabilities                  682.3        727.7
Other long-term liabilities                  489.4        465.2
Stockholders' equity
 Common stock                                  3.3          3.3
 Accumulated deficit                        (582.6)      (673.5)
 Other capital                             3,788.4      3,763.1
 Accumulated other comprehensive loss     (2,207.0)    (2,236.9)
                                        ----------   ----------
 Stockholders' equity                      1,002.1        856.0
                                        ----------   ----------
 Total                                    $5,154.8     $4,981.4
                                        ==========   ==========



                        UNISYS CORPORATION
               CONSOLIDATED STATEMENT OF CASH FLOWS
                            (Millions)

                                              Six Months Ended
                                                  June 30
                                             ------------------
                                               2003       2002
                                             -------    -------
Cash flows from operating activities
Net income                                     $91.0      $74.9
Add (deduct) items to reconcile
 net income to net cash provided
 by operating activities:
Depreciation and amortization
 of properties                                  88.9       74.6
Amortization:
 Marketable software                            59.9       61.0
 Deferred outsourcing contract costs            16.5        9.0
(Increase) in deferred
 income taxes, net                              (1.5)      (2.2)
(Increase) decrease in receivables, net         (6.6)     132.6
Decrease in inventories                         19.5       72.7
(Decrease) in accounts payable
 and other accrued liabilities                (169.8)    (302.5)
Increase (decrease) in income
 taxes payable                                  17.5       (2.3)
(Decrease) in other liabilities                (22.5)     (22.0)
(Increase) in other assets                     (39.1)    (131.5)
Other                                           (5.6)      48.3
                                             -------    -------
Net cash provided by operating activities       48.2       12.6
                                             -------    -------
Cash flows from investing activities
 Proceeds from investments                   2,387.5    1,476.7
 Purchases of investments                   (2,421.7)  (1,490.6)
 Investment in marketable software             (76.9)     (71.2)
 Capital additions of properties              (112.0)    (106.1)
 Purchases of businesses                        (2.0)      (3.9)
                                             -------    -------
Net cash used for investing activities        (225.1)    (195.1)
                                             -------    -------
Cash flows from financing activities
 Proceeds from issuance of long-term debt      293.3
 Net (reduction in) proceeds from
   short-term borrowings                       (59.6)      39.0
 Proceeds from employee stock plans             13.9       16.1
 Payments of long-term debt                     (3.0)      (1.2)
                                             -------    -------
Net cash provided by financing activities      244.6       53.9
                                             -------    -------
Effect of exchange rate changes on cash
 and cash equivalents                           12.3        3.8
                                             -------    -------
Increase (decrease) in cash
  and cash equivalents                          80.0     (124.8)
Cash and cash equivalents, beginning of
 period                                        301.8      325.9
                                             -------    -------
Cash and cash equivalents, end of period      $381.8     $201.1
                                             =======    =======

   Short Name: Unisys Corp
   Category Code: IR
   Sequence Number: 00007230
   Time of Receipt (offset from UTC): 20030717T012411+0100