Why Unisys Shares Popped


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: Shares of IT services specialist Unisys climbed 10% today after its quarterly results easily topped Wall Street expectations.

So what: The stock was crushed in late October on concerns over slumping demand, but a wide fourth-quarter profit beat -- adjusted EPS of $0.85 versus the consensus of $0.57 -- reinforces optimism over management's initiatives to cope. Although revenue fell 14% during the quarter, improving technology segment margins, coupled with ongoing debt reduction, are giving Mr. Market good feelings about Unisys' financial position going forward.

Now what: Don't let today's pop prevent you from looking into the stock. "In an uncertain business environment, we increased our profitability and generated significant free cash flow," said Chairman and CEO Ed Coleman. "We also continued to enhance our solution portfolio to strengthen our competitive profile. We remain focused on driving profitable growth in the year ahead." With the stock still trading at a cheapish forward P/E of 6 even after today's surge, there might even be some room left to buy into that bullishness.

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

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The article Why Unisys Shares Popped originally appeared on Fool.com.

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