Sorry I didn't mention it sooner but glanced at the Cavuto Report yesterday (FOX?) and the panel included a guy from TheStreet.com who said that part of the cause for the $ downturn was because of the problem everyone "is sick of hearing about - Y2k". He said something to the effect that we have all been believing that there would be no problems and now we hear that Unisys (I think that's who he said) is having real Y2k problems. Sorry I didn't take notes - but it did catch my attention. I think I will go do a search for news clips on Unisys.....

-- Kristi (securxsys@cs.com), October 16, 1999

Answers

Well,

I did a quick news search for "Unisys" and found no references to Y2k. Went to thestreet.com and found a picture of the guy who did the speaking - "Cramer" and sent him an e-mail to please clarify his statement. Will let you know if I hear any more.

-- Kristi (securxsys@cs.com), October 16, 1999.

Went to the website for Unisys and nosed around a bit - the only thing I quickly came across was the following alert updated October 12, 1999 for a version (older) of a software previously claimed to be Y2k compliant: http://www.corp.unisys.com/Unisys/y2k.NSF/5097bb213e35a9888525662d0044 d00b/6affa277b40e2e468525665e0042bb2d?OpenDocument

I don't see that as being really significant - but don't know anymore about it than what I just read....... back to digging.

-- Kristi (securxsys@cs.com), October 16, 1999.

Here is one of the best explanations of windowing I have seen plus an explanation of the potential problems. I found it at Sequent's website (apparently they supply some products to Unisys).: (snip)

Q: How do Sequent products handle dates with the year represented with two digits versus four digits? For example, how would Sequent products process dates that are written in the following format: 12/31/99 and 12/31/00?

A: There is no reliable way to interpret a two-digit date as a four- digit date. There are a number of calculation methods or algorithms, which assume a two-digit date represents some four- digit date. These algorithms work by windowing, which means there is an assumed period when a number like 70 will represent 1970, versus 2070. Sequent adheres to the POSIX standard, which interprets any two-digit date greater than or equal to 69 to be in the 1900s, and any date between 0 and 68 inclusive, to be in the 2000s. Thus, in this example, the date 99 represents the year 1999 and the date 00 represents the year 2000.

Note that while the POSIX standard is widely accepted and adhered to within the Unix community, application products and data base management systems can and do use a variety of windowing schemes. Unpredictable results can occur when these products share data back and forth, making it important to test your particular combination of products.

(snip)

Unpredictable results...... verrrrrry eeeeenteresting. :)

-- Kristi (securxsys@cs.com), October 16, 1999.

It's not because Unisys has Y2K problems. It's because of "lockdowns", where clients or potential clients are not using their services because money is being diverted for Y2K fixes and contingency planning ... instead of upgrades ... or anything new.

From SILICONE INVESTOR: From: flatsville Thursday, Oct 14 1999 4:58PM

As some of you may have noticed The Street took Unisys out and shot it today. I just heard Bob Pisani on CNBC say something to the effect that traders were agahst at the punishment it received, but there was a lot of comment on the floor to the effect that the company may have trouble into the first quarter due to y2k ... that this y2k thing is a real problem ... as though this was some sort of epiphany...

Good Gawd! Are they really this stupid? (Did I really just ask that question?)

-----------------------------------------------------------

October 14, 1999 12:51pm

Unisys shares plummet despite strong 3Q earnings Fair Use/etc...

By Larry Barrett ZDII

Unisys Corp. (NYSE: UIS) beat Street estimates by 7 cents a share in its third quarter, but its shares plunged 14 1/4, or 34 percent, to 28 Thursday because its total sales improved only 4 percent compared to the year-ago quarter.

Making matters worse, Unisys said its revenue growth will be "sluggish" in the fourth quarter though it will likely meet analysts' earnings estimates.

The computer services provider raked in $137 million, or 43 cents a share, on sales of $1.87 billion compared to $67 million, or 25 cents a share, on sales of $1.79 billion in the year-ago quarter.

"We delivered a sharp increase in earnings in the third quarter," said CEO Larry Weinbach in a prepared release. "A better-than-expected performance in our technology business, combined with margin improvement in our services business and continued tight expense control, helped us achieve an operating profit margin of 12.3 percent compared to 11 percent a year ago."

Last quarter, Unisys hurdled analysts' estimates by a nickel a share, earning $119.7 million, or 38 cents a share, on sales of $1.89 billion.

Without the negative effect of translating foreign currencies into U.S. dollars, sales would have grown 7 percent. By contrast, second-quarter revenue grew 12 percent, or 9 percent, including the effect of currency translation.

Most analysts were expecting sales growth of around 8 percent this quarter.

In the quarter, Unisys continued to retire preferred stock and debt in a bid to lighten a staggering load of debt payments and preferred dividend payouts left over from the 1986 merger of mainframe makers Burroughs and Sperry that formed Unisys. Over the past two years, the company has reduced long-term debt by $1.3 billion and slashed annual interest expense by more than $125 million. Long-term debt is now less than $1 billion.

"While we are making excellent progress in reducing costs, improving margins, and transforming our balance sheet, we clearly have work to do in accelerating growth at the top line," Weinbach said in the release.

Unisys reported good revenue growth in international markets in the third quarter, driven by very substantial gains in Japan and good gains in Europe, it said. But U.S. revenue was flat as strong gains in commercial business were offset by declines in the company's Federal government business.

The company said that its networking services business, particularly in its work for the U.S. government sector, is being hurt by intense competitive pricing pressures and unexpected delays in the start-up of certain contracts. [Attributed to Y2K.]

Unisys shares soared to a high of 49 11/16 in September after hitting a 52-week low of 20 15/16 last October.

Twelve of the 13 analysts following the stock maintain either a "buy" or "strong buy" recommendation.

Reuters contributed to this report.

-- Cheryl (Transplant@Oregon.com), October 17, 1999.

Thanks Cheryl!

-- Kristi (securxsys@cs.com), October 17, 1999.

Certainly explains why Unisys hit their insurance company up for "Y2K damages": GTE, Xerox, Unisys sue for Y2K repairs

...GTE filed the first lawsuit for $400 million in June against Allendale Mutual. American Guarantee & Liability Insurance initiated the Xerox court case by asking a judge to decide whether it has to cover a $183 million claim by Xerox. Unisys, the latest to sue, has yet to stipulate damages.

The industry already expects to pay up to $35 billion for Y2K liability claims. That amount could balloon if sue-and-labor claims are successful in court.

Unisys lawyer Robert Carter believes relatively few large companies can sue using the sue-and-labor theory. However, if the industry expects to pay nothing, it should be reminded that it also expected to pay nothing for massive asbestos and pollution claims, he says...

Sounds like they need some cash to help with that 4Q slowdown. 'Course, unless the insurers settle quickly, Unisys may have to wait quite a while before they get a whiff of the green.

-- Mac (sneak@lurk.hid), October 18, 1999.