In a recent development, Unisys Corp (NYSE:UIS), a global information technology company, has settled with the U.S. Securities and Exchange Commission (SEC) over an investigation into the company's disclosure practices related to certain cybersecurity incidents. The settlement, announced today, concludes the SEC's probe into the matter, which Unisys had previously reported in its regulatory filings.
The SEC's investigation centered on Unisys's policies, procedures, and risk disclosures concerning cybersecurity incidents that the company disclosed in November 2022. The settlement terms involve Unisys's agreement to a cease and desist order, which asserts violations of non-scienter-based provisions of federal securities laws—indicating that the violations did not involve knowledge, intent, or recklessness.
As part of the settlement, Unisys has agreed to pay a $4 million civil penalty, a sum that was fully accounted for in the company's financial statements for 2023 and considered in its 2024 free cash flow projections. Unisys has not admitted to any wrongdoing as part of the settlement agreement.
The SEC acknowledged Unisys's cooperation during the investigation and noted the company's efforts to enhance its cybersecurity measures and disclosure policies following the disclosure of a material weakness in November 2022. These improvements include bolstering cybersecurity personnel and tools, and refining risk management practices.
The settlement aims to ensure that Unisys adheres to the stipulated securities laws moving forward, thereby safeguarding investor interests. This development is based on information provided in a press release statement.
In other recent news, Unisys Corporation has been highlighted for its steady growth in digital services and its strong start to the year. First quarter revenues and profits for the global information technology company have slightly surpassed market expectations, keeping the company on track to meet its annual financial targets. According to Canaccord Genuity, Unisys has shown a significant improvement in its corporate transformation, signing three times as much new business in the first half of the year compared to the whole of the previous year.
The company's growth in next-generation service offerings that focus on the digital workplace and cloud/infrastructure has been described as steady. Unisys has also managed to expand its services total addressable market back into some traditional tech services areas, where the margin potential is now seen as more favorable. Despite a slight decrease in total company TCV, new logo TCV more than doubled, indicating strong market demand for their solutions.
These developments come amidst Unisys's ongoing efforts to improve operational efficiency, reduce SG&A costs, and increase free cash flow. The company is expanding its addressable markets with offerings like Unisys logistics optimization and is prioritizing AI initiatives.
Despite a minor decrease in total company revenue, Unisys anticipates revenue growth in the range of -1.5% to +1.5% for the full year and expects revenue growth to pick up in the second half of the year.
InvestingPro Insights
As Unisys Corp (NYSE:UIS) navigates the aftermath of its SEC settlement, investors may find value in examining the company's current financial position and market performance. According to InvestingPro data, Unisys has shown a remarkable 1-year price total return of 145.16%, indicating strong market confidence despite recent regulatory challenges. This aligns with an InvestingPro Tip highlighting the company's high return over the last year.
The company's market capitalization stands at $473.56 million, with a revenue of $1,988.2 million for the last twelve months as of Q2 2024. While Unisys is currently not profitable, with an operating income margin of -15.64%, an InvestingPro Tip suggests that analysts predict the company will be profitable this year. This forecast could be particularly relevant in light of the recent $4 million settlement and its impact on the company's financials.
For investors seeking a deeper understanding of Unisys's potential, InvestingPro offers 7 additional tips, providing a more comprehensive analysis of the company's financial health and market position.
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