Unisys saw its shares fall 34 per cent yesterday after the computing services group warned that second-quarter revenue and earnings would be more than 50 per cent below market expectations.

It blamed the deferral of some large contracts to later in the year, weakness in its government and financial services business and currency fluctuations.

The shares fell $8.44 (€8.84) to $14.75, making the company the biggest percentage loser on the New York Stock Exchange.

Unisys said it expected diluted earnings for the three months to June 30th to be between 18 and 20 US cents a share against expectations of 37 US cents. Revenues for the quarter would be between $1.62 billion and $1.65 billion, a fall of between 13 and 15 per cent on last time.

The company said the earnings figure had been estimated before a previously announced after-tax extraordinary charge of about $20 million for the retirement of debt. Unisys will announce the actual figures on July 18th.

Unisys was one of many US companies that have warned of disappointing profits since Wednesday, leading to a general decline in share prices.

Unisys, based in Pennsylvania, is one of the few remaining manufacturers of mainframe computers left in the world market.

In common with other makers including IBM, it has been transforming itself into a computing services company.

The company said it expected services revenues and orders to fall by more than 10 per cent in the second quarter compared with last year. Technology revenue computer hardware would be down by almost 10 per cent against a strong second quarter in 1999.