Unisys stock drops after CEO Coleman's firing

Unisys Corp. shares tumbled Monday to $20.84, down 11.69 percent, after the Blue Bell-based computer services and systems company said it ousted chief executive J. Edward Coleman, six years after the former Gateway Inc. boss was hired to turn the company around in a howling recession.

His board gave Coleman credit for slashing debt and other costs and preparing new services for the fast-changing business-software market. But after years of lower sales and recent weaker-than-expected profits, lead independent director Paul Weaver said in a statement that it was time to search for a new leader for the company, which employs 23,000 worldwide.

Unisys stock was priced at $36.05 on Feb. 28, 2014.

Coleman summed up the problems facing Unisys in a July conference call with investors: "The information technology industry is going through major transition, driven by the disruptive trends of cloud, mobility, big data, social computing, and increasing cybersecurity threats."

Among other jobs, Unisys is in the early stages of a seven-year, $681 million contract to combine seven Pennsylvania state government data centers into a single "secure hybrid cloud involvement" that Coleman promised would "reduce the operating costs while enhancing flexibility and service delivery."

The company also counts the U.S. airlines and financial institutions as major clients.

Unisys's mainframe server business, while profitable, has been shrinking for years; its many retirees cost tens of millions a year in pension liabilities.

Coleman told investors in July that he was hopeful about sales prospects for a number of Unisys products, including applications for enterprise software companies such as SAP AG, whose chief executive, Bill McDermott, is based in Newtown Square.

Like Unisys, SAP and other big software companies are struggling to keep sales flowing, as business software moves to mobile and cloud-based applications.