SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549
                    __________________________________

                                FORM 10-Q

(Mark One)

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2001

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________.

                        Commission file number 1-8729


                             UNISYS CORPORATION
            (Exact name of registrant as specified in its charter)

               Delaware                            38-0387840
       (State or other jurisdiction             (I.R.S. Employer
       of incorporation or organization)        Identification No.)

               Unisys Way
        Blue Bell, Pennsylvania                          19424
       (Address of principal executive offices)        (Zip Code)

Registrant's telephone number, including area code:  (215) 986-4011


     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act 
of 1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject 
to such filing requirements for the past 90 days.  YES [X]    NO [ ]

     Number of shares of Common Stock outstanding as of September 30, 2001:
319,106,355.






<PAGE> 2


Part I - FINANCIAL INFORMATION

Item 1.  Financial Statements.


<TABLE>
                             UNISYS CORPORATION
                    CONSOLIDATED BALANCE SHEET (UNAUDITED)
                                (Millions)
<CAPTION>   
                                          
                                         September 30,   December 31,
                                             2001            2000
                                         -------------   ------------
<S>                                       <C>             <C>
Assets
------
Current assets
Cash and cash equivalents                 $  219.7         $  378.0
Accounts and notes receivable, net           989.3          1,247.4
Inventories
   Parts and finished equipment              247.1            249.4
   Work in process and materials             151.3            176.1
Deferred income taxes                        464.1            460.6
Other current assets                         128.2             75.5
                                          --------         --------
Total                                      2,199.7          2,587.0
                                          --------         --------

Properties                                 1,429.4          1,400.6
Less-Accumulated depreciation                890.2            890.7
                                          --------         --------
Properties, net                              539.2            509.9
                                          --------         --------
Investments at equity                        204.7            225.8
Software, net of accumulated amortization    308.3            296.7
Prepaid pension cost                       1,213.9          1,063.0
Deferred income taxes                        583.6            583.6
Goodwill                                     168.6            186.3
Other assets                                 376.0            261.0
                                          --------         --------
Total                                     $5,594.0         $5,713.3
                                          ========         ========

Liabilities and stockholders' equity
------------------------------------
Current liabilities
Notes payable                             $  278.5         $  209.5

Current maturities of long-term debt           4.2             16.8
Accounts payable                             558.8            847.7
Other accrued liabilities                  1,059.3          1,319.1
Income taxes payable                         267.3            288.3
                                          --------         --------
Total                                      2,168.1          2,681.4
                                          --------         --------
Long-term debt                               611.9            536.3
Other liabilities                            547.6            309.5

Stockholders' equity
Common stock, shares issued: 2001, 321.0;
   2000,317.3                                  3.2              3.2
Accumulated deficit                       (  727.1)        (  829.4)
Other capital                              3,700.3          3,656.0
Accumulated other comprehensive loss      (  710.0)        (  643.7)
                                          --------         --------
Stockholders' equity                       2,266.4          2,186.1
                                          --------         --------
Total                                     $5,594.0         $5,713.3
                                          ========         ========
</TABLE>

See notes to consolidated financial statements.



<PAGE> 3

<TABLE>


                              UNISYS CORPORATION
                CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
                     (Millions, except per share data)

<CAPTION> 
                                       Three Months             Nine Months
                                     Ended September 30     Ended September 30
                                     ------------------     ------------------
                                       2001      2000         2001      2000
                                     --------  --------     --------  --------
<S>                                  <C>       <C>          <C>       <C>
Revenue                              $1,376.0  $1,690.9     $4,461.2  $4,956.7
                                     --------  --------     --------  --------
Costs and expenses
  Cost of revenue                       996.1   1,216.2      3,256.3   3,461.9    
  Selling, general and
    administrative                      262.7     320.1        784.4     924.1      
  Research and development expenses      73.4      77.5        224.6     237.8    
                                     --------  --------     --------  --------
                                      1,332.2   1,613.8      4,265.3   4,623.8    
                                     --------  --------     --------  --------
Operating income                         43.8      77.1        195.9     332.9      

Interest expense                         16.5      18.5         50.0      57.7       
Other income (expense), net               3.9       6.4         32.6      36.5      
                                     --------  --------     --------  --------
Income before income taxes               31.2      65.0        178.5     311.7   
Provision for income taxes               10.3      22.1         59.0     106.0      
                                     --------  --------     --------  --------
Income before extraordinary items        20.9      42.9        119.5     205.7      
Extraordinary items                                          (  17.2)    (19.8)
                                     --------  --------     --------  --------
Net income                           $   20.9  $   42.9     $  102.3  $  185.9      
                                     ========  ========     ========  ========

Earnings per share
  Basic                              
    Before extraordinary items       $    .07  $    .14     $    .37  $    .66
    Extraordinary items                                         (.05)     (.06)
                                     --------  --------     --------  --------
     Total                           $    .07  $    .14     $    .32  $    .60
                                     ========  ========     ========  ========

  Diluted
    Before extraordinary items       $    .07  $    .14     $    .37  $    .65
    Extraordinary items                                         (.05)     (.06)
                                     --------  --------     --------  --------
     Total                           $    .07  $    .14     $    .32  $    .59
                                     ========  ========     ========  ========    

</TABLE>

See notes to consolidated financial statements.






<PAGE> 4

<TABLE>

                           UNISYS CORPORATION
               CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
                                (Millions)
<CAPTION>
                                                    Nine Months Ended
                                                      September 30
                                                    -----------------
                                                      2001       2000
                                                    --------   -------
<S>                                                 <C>       <C>
Cash flows from operating activities
Income before extraordinary items                   $ 119.5   $  205.7
Add(deduct) items to reconcile income before
   extraordinary items to net cash provided by 
   (used for) operating activities:           
Extraordinary items                                  ( 17.2)     (19.8)
Depreciation                                          100.6      103.9        
Amortization:   
   Marketable software                                 88.3       90.2
   Goodwill                                            12.5       14.6         
(Increase) in deferred income taxes, net             (  3.5)    (  9.6) 
Decrease in receivables, net                          168.8        8.4
Decrease (increase) in inventories                     27.0     ( 46.2)       
(Decrease) in accounts payable and
   other accrued liabilities                         (561.7)    (335.6)    
(Decrease) increase in income taxes payable          ( 21.0)      10.5        
Increase(decrease) in other liabilities               241.9     (  3.4)     
(Increase) in other assets                           (226.8)    (110.6)     
Other                                                   6.9       19.2        
                                                    -------     ------
Net cash used for operating activities               ( 64.7)    ( 72.7)      
                                                    -------     ------
Cash flows from investing activities
   Proceeds from investments                        1,976.6      525.1       
   Purchases of investments                        (1,967.5)    (454.0)     
   Investment in marketable software                ( 100.0)    (113.6)     
   Capital additions of properties                  ( 134.8)    (143.2)     
   Purchases of businesses                          (   2.2)    ( 13.9)     
   Proceeds from sales of properties                              17.0        
                                                    -------     ------
Net cash used for investing activities              ( 227.9)    (182.6)    
                                                    -------     ------
Cash flows from financing activities
   Proceeds from issuance of long-term debt           389.9       
   Payments of long-term debt                       ( 354.3)    (447.2)          
   Net proceeds from short-term borrowings             68.9      442.5        
   Proceeds from employee stock plans                  26.2       42.5        
                                                    -------     ------
Net cash provided by financing activities             130.7       37.8      
                                                    -------     ------
Effect of exchange rate changes on
   cash and cash equivalents                            3.6     ( 11.6)     
                                                    -------     ------

Decrease in cash and cash equivalents               ( 158.3)    (229.1)     
Cash and cash equivalents, beginning of period        378.0      464.0       
                                                    -------    -------
Cash and cash equivalents, end of period            $ 219.7    $ 234.9
                                                    =======    =======
</TABLE>

See notes to consolidated financial statements.
                                               




<PAGE> 5

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In the opinion of management, the financial information furnished
herein reflects all adjustments necessary for a fair presentation of
the financial position, results of operations and cash flows for the
interim periods specified.  These adjustments consist only of normal
recurring accruals.  Because of seasonal and other factors, results
for interim periods are not necessarily indicative of the results to
be expected for the full year.

a. The following table shows how earnings per share were computed for the
   three and nine months ended September 30, 2001 and 2000 (dollars in millions,
   shares in thousands):

                                  Three Months Ended       Nine Months Ended   
                                     September 30            September 30
                                  ------------------      ------------------ 
                                    2001       2000         2001      2000
                                  -------    -------      -------    -------
    Basic Earnings Per Share

    Income before 
      extraordinary items         $  20.9    $  42.9      $ 119.5    $ 205.7
    Extraordinary items                                    ( 17.2)    ( 19.8)
                                  -------    -------      -------    -------
    Net income                    $  20.9    $  42.9      $ 102.3    $ 185.9
                                  =======    =======      =======    =======
    
    Weighted average shares       318,761    313,744      317,576    312,473
                                  =======    =======      =======    =======

    Basic earnings per share
      Before extraordinary 
        items                     $   .07    $   .14      $   .37    $   .66
      Extraordinary items                                    (.05)      (.06)
                                  -------    -------      -------    -------
        Total                     $   .07    $   .14      $   .32    $   .60
                                  =======    =======      =======    =======

    Diluted Earnings Per Share

    Income before 
      extraordinary items         $  20.9    $  42.9      $ 119.5    $ 205.7
    Extraordinary items                                    ( 17.2)    ( 19.8)
                                  -------    -------      -------    -------
    Net income                    $  20.9    $  42.9      $ 102.3    $ 185.9
                                  =======    =======      =======    =======

    Weighted average shares       318,761    313,744      317,576    312,473
    Plus incremental shares 
      from assumed exercise
      of employee stock plans       1,394      1,772        1,951      4,066
                                  -------    -------      -------    -------
    Adjusted weighted average
      shares                      320,155    315,516      319,527    316,539
                                  =======    =======      =======    =======

    Diluted earnings per share
      Before extraordinary 
        items                     $   .07    $   .14      $   .37    $   .65
      Extraordinary items                                    (.05)      (.06)
                                  -------    -------      -------    -------
        Total                     $   .07    $   .14      $   .32    $   .59
                                  =======    =======      =======    =======

At September 30, 2001, 24.3 million shares related to employee stock plans 
were not included in the computation of diluted earnings per share because 
the option prices are above the average market price of the company's common 
stock.


<PAGE> 6

b. Effective January 1, 2001, the company adopted Statement of Financial
   Accounting Standards ("SFAS") No. 133 "Accounting for Derivative
   Instruments and Hedging Activities."  This statement establishes accounting
   and reporting standards for derivative instruments and hedging activities.
   SFAS No. 133 requires a company to recognize all derivatives as either assets
   or liabilities in the statement of financial position and measure those
   instruments at fair value.  Derivatives that are not hedges must be adjusted
   to fair value through income.  If the derivative is a hedge, depending on the
   nature of the hedge, changes in the fair value of derivatives are either
   offset against the change in fair value of assets, liabilities, or firm
   commitments through earnings or recognized in other comprehensive income
   until the hedged item is recognized in earnings.  The ineffective portion of
   a derivative's change in fair value will be immediately recognized in
   earnings.  The cumulative effect of the change in accounting principle due to
   the adoption of SFAS No. 133 resulted in the recognition of income of $3.3 
   million (net of $1.8 million of tax) in other comprehensive income.
                                      
c. A summary of the company's operations by business segment for the three and
   nine-month periods ended September 30, 2001 and 2000 is presented below (in
   millions of dollars):

                             Total    Corporate    Services    Technology
   Three Months Ended        -----    ---------    --------    ----------  
   September 30, 2001
   ------------------
   Customer revenue         $1,376.0               $1,051.3     $  324.7
   Intersegment                        $(102.0)        20.3         81.7
                            --------   -------     --------     --------
   Total revenue            $1,376.0   $(102.0)    $1,071.6     $  406.4     
                            ========   =======     ========     ========
   Operating income(loss)   $   43.8   $( 10.0)    $   23.5     $   30.3      
                            ========   =======     ========     ========
   Three Months Ended      
   September 30, 2000
   ------------------
   Customer revenue         $1,690.9               $1,200.2     $  490.7
   Intersegment                        $( 92.8)        10.6         82.2
                            --------   -------     --------     --------
   Total revenue            $1,690.9   $( 92.8)    $1,210.8     $  572.9
                            ========   =======     ========     ========
   Operating income         $   77.1   $   2.8     $   18.1     $   56.2
                            ========   =======     ========     ========

   Nine Months Ended  
   September 30, 2001
   ------------------
   Customer revenue         $4,461.2               $3,311.7     $1,149.5  
   Intersegment                        $(267.0)        51.8        215.2
                            --------   -------     --------     --------
   Total revenue            $4,461.2   $(267.0)    $3,363.5     $1,364.7
                            ========   =======     ========     ========
   Operating income (loss)  $  195.9   $( 29.6)    $   60.4     $  165.1
                            ========   =======     ========     ========

   Nine Months Ended
   September 30, 2000
   ------------------
   Customer revenue         $4,956.7               $3,454.1     $1,502.6  
   Intersegment                        $(326.7)        35.2        291.5     
                            --------   -------     --------     --------
   Total revenue            $4,956.7   $(326.7)    $3,489.3     $1,794.1   
                            ========   =======     ========     ========
   Operating income         $  332.9   $  20.4     $   37.5     $  275.0
                            ========   =======     ========     ========




<PAGE> 7
   Presented below is a reconciliation of total business segment operating
   income to consolidated income before taxes (in millions of dollars):

                                       Three Months Ended   Nine Months Ended
                                         September 30,        September 30,
                                       ------------------   -----------------
                                         2001      2000       2001      2000
                                         ----      ----       ----      ----
   Total segment operating income       $ 53.8    $ 74.3     $225.5    $312.5
   Interest expense                      (16.5)    (18.5)     (50.0)    (57.7) 
   Other income (expense), net             3.9       6.4       32.6      36.5  
   Corporate and eliminations            (10.0)      2.8      (29.6)     20.4 
                                        ------    ------     ------    ------
   Total income before income taxes     $ 31.2    $ 65.0     $178.5    $311.7 
                                        ======    ======     ======    ======

d. Comprehensive income for the three and nine months ended September 30, 2001 
   and 2000 includes the following components (in millions of dollars):

                                       Three Months Ended   Nine Months Ended
                                         September 30,        September 30,
                                       ------------------   -----------------
                                         2001      2000       2001      2000
                                         ----      ----       ----      ----
   Net income                           $ 20.9    $ 42.9     $102.3    $185.9
 
   Other comprehensive income (loss)
     Cumulative effect of change in
       accounting principle (SFAS
       No. 133), net of tax of $1.8                             3.3
     Cash flow hedges
       Income (loss), net of tax of     
        $(2.3)and $2.1                    (4.2)                 3.9       
       Reclassification adjustments,
        net of tax of $(.9) and $(3.5)    (1.6)                (6.5)  
     Foreign currency translation         
       adjustments, net of tax of
       $0, $5.1, $0, and $13.7           ( 6.2)    ( 3.1)     (67.0)    (35.2)
                                        ------    ------     ------    ------
     Total other comprehensive
       income (loss)                     (12.0)    ( 3.1)     (66.3)    (35.2)
                                        ------    ------     ------    ------
     Comprehensive income (loss)        $  8.9    $ 39.8     $ 36.0    $150.7
                                        ======    ======     ======    ======
    
    Accumulated other comprehensive income (loss) as of December 31, 2000 and
    September 30, 2001 is as follows (in millions of dollars):

                                                                      Cash
                                                       Translation    Flow
                                               Total   Adjustments   Hedges
                                               -----   -----------   ------

    Balance at December 31, 1999             $(570.4)    $(570.4)    $    -
    Current-period change                     ( 73.3)     ( 73.3)
                                             -------     -------     ------
    Balance as December 31, 2000              (643.7)     (643.7)         -
    Current-period change                     ( 66.3)     ( 67.0)        .7
                                             -------     -------     ------
    Balance at September 30, 2001            $(710.0)    $(710.7)    $   .7
                                             =======     =======     ======

e.   The amount credited to stockholders' equity for the income tax benefit
     related to the company's stock plans for the nine months ended September 
     30, 2001 and 2000 was $4.1 million and $10.5 million, respectively. The 
     company expects to realize these tax benefits on future Federal income tax
     returns.

f.   Certain prior-period amounts have been reclassified to conform with the
     current-period presentation.


<PAGE> 8


I
tem 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations.


Overview
--------

During the third quarter of 2001, the company continued to face a very 
challenging economic environment, with economic uncertainty compounded by the 
events of September 11, 2001.  Nevertheless, the company managed its business 
profitably in the quarter, primarily through tight controls on expenses and 
actions taken to strengthen its balance sheet and reduce interest expense. 
	
In this economic environment, the company saw its customers, particularly in 
airlines and travel, financial services, and communications, delay planned IT 
decisions.  This resulted, late in the quarter, in a sharp falloff in demand in 
key areas of the company's business, particularly high-end enterprise servers 
and networking and systems integration projects.  Given the global economic 
uncertainty and the impact it has had on demand for the company's products and 
services, the company plans to take additional actions in the fourth quarter of 
2001 to further reduce its cost structure.  The company expects to take an 
estimated pre-tax charge of $200 million in the fourth quarter of 2001 to cover 
a workforce reduction of approximately 3,000 people and other actions.  Included
in the charge is an early retirement incentive for certain eligible groups of 
U.S. employees.  At the same time, the company plans to continue to invest in 
enhancing its skills mix in services and funding further development and 
marketing of its high-end, CMP-based servers.

Results of Operations
---------------------

The following discussion of results of operations compares the results for the 
three and nine months ended September 30, 2001 with both the as reported and pro
forma results for the comparable periods of 2000.  The pro forma results exclude
low-margin commodity hardware business that the company has de-emphasized as a 
result of its focus on higher value-added business areas.  For the three and 
nine months ended September 30, 2000, financial highlights on an as reported and
on a pro forma basis are as follows (in millions of dollars, except per share 
data):
                               Three Months Ended         Nine Months Ended
                               September 30, 2000         September 30, 2000
                             ----------------------      --------------------
                                As           Pro            As         Pro
                             Reported       Forma        Reported     Forma
                             --------      -------       --------    -------

Revenue                      $1,690.9      $1,460.6      $4,956.7    $4,414.2
Cost of revenue               1,216.2         994.7       3,461.9     2,942.3
Gross profit %                   28.1%         31.9%         30.2%       33.3%
S,G&A                           320.1         311.4         924.1       900.5
S,G&A as a % of revenue          18.9%         21.3%         18.6%       20.4%
Operating income                 77.1          79.1         332.9       340.5
Operating income as a % 
  of revenue                      4.6%          5.4%          6.7%        7.7%
Income before extraordinary
  items                          42.9          44.2         205.7       211.0
Diluted earnings per share -
  before extraordinary items      .14           .14           .65         .67


For the three months ended September 30, 2001, the company reported net income 
of $20.9 million, or $.07 per diluted share, compared to $42.9 million, or $.14
per diluted share, for the three months ended September 30, 2000.  

Total revenue for the quarter ended September 30, 2001 was $1.38 billion, down 
19% from revenue of $1.69 billion for the quarter ended September 30, 2000.  
The decrease in revenue was principally due to lower sales of commodity products
(discussed above) and enterprise servers.  Excluding the negative impact of 


<PAGE> 9

foreign currency translations, revenue in the quarter was down 15% when compared
to the year-ago period.  When compared to pro forma revenue of $1.46 billion for
the third quarter of 2000, revenue for the current quarter decreased 6% (1% on a
constant currency basis).  

Total gross profit was 27.6% in the third quarter of 2001 compared to 28.1% in 
the year-ago period, principally due to a lower mix of higher-margin products
and services than in the year-ago quarter as well as pricing pressures.

For the three months ended September 30, 2001, selling, general and 
administrative expenses were $262.7 million (19.1% of revenue) compared to 
$320.1 million (18.9% of revenue) for the three months ended September 30, 2000.
The decrease reflected tight controls placed on discretionary spending during 
the quarter as well as the benefits of the restructuring actions announced in 
the fourth quarter of 2000.  

For the third quarter of 2001, the company reported an operating income percent
of 3.2% compared to 4.6% (5.4% on a pro forma basis) for the third quarter of 
2000.

Information by business segment is presented below (in millions):
                                                                     
                                       Elimi-    
                            Total      nations      Services    Technology
                           -------     -------      --------    ----------
Three Months Ended
September 30, 2001
------------------
Customer revenue          $1,376.0                  $1,051.3    $324.7
Intersegment                           $(102.0)         20.3      81.7
                          --------     -------      --------    ------      
Total revenue             $1,376.0     $(102.0)     $1,071.6    $406.4
                          ========     =======      ========    ====== 

Gross profit percent          27.6%                     20.8%     42.1%
                          ========                  ========    ======
Operating income
     percent                   3.2%                      2.2%      7.5%
                          ========                  ========    ======

Three Months Ended
September 30, 2000 - As Reported
--------------------------------
Customer revenue          $1,690.9                  $1,200.2    $490.7
Intersegment                           $( 92.8)         10.6      82.2
                          --------     -------      --------    ------
Total revenue             $1,690.9     $( 92.8)     $1,210.8    $572.9
                          ========     =======      ========    ======

Gross profit percent          28.1%                     21.6%     38.9%
                          ========                  ========    ======
Operating income
     percent                   4.6%                      1.5%      9.8%
                          ========                  ========    ======   

Three Months Ended
September 30, 2000 - Pro Forma
------------------------------
Customer revenue          $1,460.6                  $1,048.0    $412.6
Intersegment                           $( 96.1)         21.7      74.4
                          --------     -------      --------    ------      
Total revenue             $1,460.6     $( 96.1)     $1,069.7    $487.0
                          ========     =======      ========    ====== 

Gross profit percent          31.9%                     23.8%     46.0%
                          ========                  ========    ======
Operating income
     percent                   5.4%                      1.6%     12.3%
                          ========                  ========    ======


<PAGE> 10

In the Services segment, customer revenue was $1.05 billion, down 12% from $1.20
billion in the year-ago period, principally due to a decline in proprietary 
maintenance and lower sales of commodity products.  The gross profit percent 
declined to 20.8% in the current quarter compared to 21.6% in the prior-year 
period, principally reflecting the startup of large outsourcing contracts, and a
lower mix of higher-margin proprietary maintenance revenue in the quarter.  
Operating income percent increased to 2.2% in the current quarter from 1.5% last
year, principally due to a decline in selling, general and administrative 
expenses.  Customer revenue in the Services segment was flat in the current 
quarter compared to pro forma revenue in the year-ago quarter.

In the Technology segment, customer revenue declined 34% to $325 million in the 
third quarter of 2001 from $491 million in the prior-year period, principally 
due to declines in enterprise server revenue and lower commodity hardware sales.
The gross profit percent was 42.1% in the current quarter compared to 38.9% in 
the prior period, reflecting lower sales of low-margin commodity hardware 
products in the current quarter.  Operating profit in this segment was 7.5% in 
the current quarter compared to 9.8% in 2000.  Customer revenue in the 
Technology segment declined 21% in the current period from pro forma revenue in 
the year-ago period.

Interest expense for the three months ended September 30, 2001 was $16.5 million
compared to $18.5 million for the three months ended September 30, 2000.  

Other income (expense), net, which can vary from quarter to quarter, was income 
of $3.9 million in the current quarter compared to income of $6.4 million in the
year-ago quarter.  

Income before income taxes was $31.2 million in the third quarter of 2001 
compared to $65.0 million last year.  The provision for income taxes was $10.3 
million in the current period (33% effective rate)compared to $22.1 million in 
the year-ago period (34% effective rate).  The decline in the effective tax rate
was principally due to tax planning strategies.

For the nine months ended September 30, 2001, net income was $102.3 million, or
$.32 per diluted share, compared to net income of $185.9 million, or $.59 per 
diluted share, last year.  Both periods include an extraordinary item for the 
early extinguishment of debt: $17.2 million, or $.05 per share, for the nine 
months ended September 30, 2001, and $19.8 million, or $.06 per share, for the 
nine months ended September 30, 2000.  Excluding these items, income in the 
current period was $119.5 million, or $.37 per share, compared to $205.7 
million, or $.65 per share, in the year-ago period.

In September 2000, the Financial Accounting Standards Board ("FASB") issued 
Statement of Financial Accounting Standards ("SFAS") No. 140, "Accounting for 
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities."
This statement revises the accounting standards for securitizations and other 
transfers of financial assets and collateral and requires certain disclosures. 
This statement is effective for transfers and servicing of financial assets 
occurring after March 31, 2001.  Adoption of SFAS No. 140 had no effect on the 
company's consolidated financial position, consolidated results of operations, 
or liquidity.

In June 2001, the FASB issued SFAS No. 141, "Business Combinations," and No. 
142, "Goodwill and Other Intangible Assets."  SFAS No. 141 requires that the 
purchase method of accounting be used for all business combinations initiated 
after June 30, 2001 and prohibits the use of the pooling-of-interests method.  
SFAS No. 141 also includes guidance on the initial recognition and measurement 
of goodwill and other intangible assets acquired in a business combination that
is completed after June 30, 2001.  SFAS No. 142 no longer permits the 
amortization of goodwill and indefinite-lived intangible assets.  Instead, these
assets must be reviewed annually for impairment in accordance with this 
statement.  The company is required to adopt SFAS No. 142 effective January 1, 
2002.  In anticipation of adoption, the company reclassified certain items in 
its financial statements and disclosed the amount of goodwill as a separate line
item in its balance sheet.  An initial impairment test must be performed in 2002
as of January 1, 2002.  An impairment charge, if any, from this initial test 
will be reported as a change in accounting principle.  The company is currently 


<PAGE> 11

assessing the impact that these statements will have on its consolidated 
financial position, consolidated results of operations or liquidity. However, 
the company anticipates that all amortization of goodwill as a charge to 
earnings (approximately $17 million yearly) will be eliminated.

Financial Condition
-------------------

Cash and cash equivalents at September 30, 2001 were $219.7 million compared to
$378.0 million at December 31, 2000.  

During the nine months ended September 30, 2001, cash used for operations was 
$64.7 million compared to a cash usage of $72.7 million for the nine months 
ended September 30, 2000, principally reflecting an improvement in working 
capital management, mainly a higher level of advance payments under long-term 
contracts.  Cash expenditures in the nine months ended September 30, 2001 
related to prior-year restructuring charges (which are included in operating 
activities) were $41 million compared to $15 million for the prior-year period,
and are expected to be approximately $10 million for the remainder of 2001 and 
$18 million in total for all subsequent years, principally for work-force 
reductions and facility costs.  Personnel reductions in the nine months ended 
September 30, 2001 related to prior-year restructuring actions were 
approximately 678 and are expected to be approximately 211 for the remainder of
the year.

Cash used for investing activities for the nine months ended September 30, 2001
was $227.9 million compared to $182.6 million during the nine months ended 
September 30, 2000 principally due to lower net proceeds from investments.  The
prior-year period included $27.5 million for the termination of a euro swap in 
proceeds from investments.

Cash provided by financing activities during the first nine months of 2001 was 
$130.7 million compared to cash provided of $37.8 million in the prior year.  
The current period includes net proceeds from issuance of long-term debt of 
$389.9 million and payments of long-term debt of $354.3 million, as described 
below.  Included in the prior period were payments of long-term debt of $447.2 
million and net proceeds of $442.5 million from short-term borrowings.
                                            
At September 30, 2001, total debt was $894.6 million, an increase of $132.0 
million from December 31, 2000.

In May and August 2001, the company issued $350 million and $50 million, 
respectively of 8 1/8% senior notes due 2006.  In June 2001, the company 
completed a cash tender offer for $319.2 million principal amount of its 11 3/4%
senior notes due 2004.  As a result of the tender, the company recorded an 
extraordinary after-tax charge of $17.2 million, net of $9.3 million tax 
benefit, or $.05 per diluted share, in the second quarter of 2001 for the 
premium paid, unamortized debt-related expenses and transaction costs of the 
tender offer.  On October 15, 2001, the company redeemed the remaining $14.9 
million outstanding 11 3/4% senior notes due 2004 at 103.917% of par.

In March 2001, the company entered into a new three-year $450 million unsecured 
credit agreement, which replaced the $400 million three-year facility that was 
to expire in June 2001.  As of September 30, 2001, $150.0 million was borrowed 
under this agreement at a rate of 4.6%.  In addition, $20.0 million was borrowed
under unsecured U.S. credit lines at a rate of 3.1%.

In April 2000, the company redeemed all of its $399.5 million outstanding 
12% senior notes.  The redemption was funded through a combination of cash and 
short-term borrowings.  In March 2000, the company entered into an additional 
$150 million credit agreement expiring April 2001 for the purpose of funding 
this redemption.  On April 12, 2001, the then outstanding balance was repaid at 
maturity and the agreement expired.

The company may, from time to time, redeem, tender for, or repurchase its debt 
securities in the open market or in privately negotiated transactions depending 
upon availability, market conditions, and other factors.



<PAGE> 12

The company has on file with the Securities and Exchange Commission an effective
registration statement covering $300 million of debt or equity securities, which
enables the company to be prepared for future market opportunities.

At September 30, 2001, the company had deferred tax assets in excess of deferred
tax liabilities of $1,301 million.  For the reasons cited below, management 
determined that it is more likely than not that $992 million of such assets will
be realized, therefore resulting in a valuation allowance of $309 million.
                                         
The company evaluates quarterly the realizability of its deferred tax assets  
and adjusts the amount of the related valuation allowance, if necessary.  The 
factors used to assess the likelihood of realization are the company's forecast
of future taxable income, and available tax planning strategies that could be 
implemented to realize deferred tax assets. Approximately $3.0 billion of future
taxable income (predominantly U.S.) is needed to realize all of the net deferred
tax assets.  Failure to achieve forecasted taxable income might affect the 
ultimate realization of the net deferred tax assets.  See "Factors that may
affect future results" below.

Stockholders' equity increased $80.3 million during the nine months ended 
September 30, 2001, principally reflecting net income of $102.3 million, $40.1 
million for issuance of stock under stock option and other plans and $4.1    
million of tax benefits related to employee stock plans, offset in part by 
currency translation of $66.3 million. 

Conversion to the Euro Currency
-------------------------------

On January 1, 1999, certain member countries of the European Union established 
fixed conversion rates between their existing currencies and the European 
Union's common currency (the "euro").  The transition period for the 
introduction of the euro began on January 1, 1999.  The company is addressing 
the issues involved with the introduction of the euro.  The more important 
issues facing the company include converting information technology systems, 
reassessing currency risk, and negotiating and amending agreements.

Based on progress to date, the company believes that the use of the euro will 
not have a significant impact on the manner in which it conducts its business. 
Accordingly, conversion to the euro is not expected to have a material effect 
on the company's consolidated financial position, consolidated results of 
operations, or liquidity.
                                             
Factors That May Affect Future Results
--------------------------------------

From time to time, the company provides information containing "forward-looking"
statements, as defined in the Private Securities Litigation Reform Act of 1995.
All forward-looking statements rely on assumptions and are subject to risks, 
uncertainties, and other factors that could cause the company's actual results 
to differ materially from expectations.  In addition to changes in general 
economic and business conditions, acts of war, terrorism and natural disasters,
these include, but are not limited to, the factors discussed below.

The company operates in an industry characterized by aggressive competition, 
rapid technological change, evolving technology standards, and short product 
life cycles.  

Future operating results will depend on the company's ability to design, 
develop, introduce, deliver, or obtain new products and services on a timely 
and cost-effective basis; on its ability to succeed in the high-end information
technology services segment; on its ability to effectively manage the shift in 
its technology business into higher growth, standards-based server products; on
its ability to mitigate the effects of competitive pressures and volatility in 
the information technology and services industry on revenues, pricing and 
margins; and on its ability to successfully attract and retain highly skilled 
people.  In addition, future operating results could be impacted by market 
demand for and acceptance of the company's service and product offerings.


<PAGE> 13

A number of the company's contracts are long-term contracts for network 
services, outsourcing, help desk and similar services, for which volumes are 
not guaranteed.  Future results will depend upon the company's ability to meet 
performance levels over the terms of these contracts.

Certain of the company's systems integration contracts are fixed-price contracts
under which the company assumes the risk for delivery of the contracted services
at an agreed-upon price.  Future results will depend on the company's ability to
profitably perform these services contracts and bid and obtain new contracts.

The company frequently enters into contracts with governmental entities.  
Associated risks and uncertainties include the availability of appropriated 
funds and contractual provisions allowing governmental entities to terminate 
agreements in their discretion before the end of their terms.

The company has commercial relationships with suppliers, channel partners and 
other parties that have complementary products, services, or skills.  Future 
results will depend in part on the performance and capabilities of these third 
parties.  Future results will also depend upon the ability of external suppliers
to deliver components at reasonable prices and in a timely manner and on the 
financial condition of, and the company's relationship with, distributors and 
other indirect channel partners.

Approximately 57% of the company's total revenue derives from international 
operations.  The risk of doing business internationally includes foreign 
currency exchange rate fluctuations, changes in political or economic 
conditions, trade protection measures, and import or export licensing 
requirements.





<PAGE> 14



P
art II - OTHER INFORMATION
-------   -----------------


Item 1.   Legal Proceedings
-------   -----------------

The company has previously reported, most recently in its Quarterly 
Report on Form 10-Q for the period ended June 30, 2001, its involvement 
in a consolidated class action lawsuit captioned In re: Unisys 
Corporation Securities Litigation, filed in the U.S. District Court for 
the Eastern District of Pennsylvania.  In the third quarter of 2001, the 
parties executed a settlement agreement, the terms of which would not 
have a material adverse effect on the company's consolidated financial 
position, consolidated results of operations or liquidity.  The 
settlement is subject to approval of the court. 




Item 6.   Exhibits and Reports on Form 8-K
-------   --------------------------------

(a)       Exhibits

          See Exhibit Index

(b)       Reports on Form 8-K

          During the quarter ended September 30, 2001, the company filed 
a Current Report on Form 8-K, dated August 16, 2001, to report under 
items 5 and 7 of such Form.






<PAGE> 15


                               SIGNATURES
                               ----------



     Pursuant to the requirements of the Securities Exchange Act of 
1934, the registrant has duly caused this report to be signed on its 
behalf by the undersigned thereunto duly authorized.

                                              UNISYS CORPORATION

Date: October 18, 2001                      By: /s/ Janet M. Brutschea Haugen
                                                -----------------------------
                                                Janet M. Brutschea Haugen
                                                Senior Vice President and 
                                                Chief Financial Officer 
                                                (Principal Financial and 
                                                 Accounting Officer)






<PAGE> 16

                             EXHIBIT INDEX

Exhibit
Number                        Description
-------                       -----------
12       Statement of Computation of Ratio of Earnings to Fixed Charges











<TABLE>

Exhibit 12

                             UNISYS CORPORATION
       COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (UNAUDITED)
                               ($ in millions)

<CAPTION>                                

                                  Nine             
                                  Months     
                                  Ended           Years Ended December 31
                                  Sept. 30, -----------------------------------
                                  2001       2000    1999   1998    1997   1996
                                  ---------  ----    ----   ----    ----   ---- 
<S>                                <C>       <C>    <C>    <C>     <C>    <C>
Fixed charges
Interest expense                   $  50.0   $ 79.8 $127.8 $171.7  $233.2 $249.7      
Interest capitalized during 
  the period                           8.5     11.4    3.6     -       -      - 
Amortization of debt issuance
  expenses                             2.1      3.2    4.1    4.6     6.7    6.3
Portion of rental expense
  representative of interest          31.7     42.2   46.3   49.1    51.8   59.8
                                    ------   ------  -----  -----   ----- ------
    Total Fixed Charges               92.3    136.6  181.8  225.4   291.7  315.8 
                                    ------   ------ ------ ------  ------ ------
Earnings                             
Income (loss) from continuing
 operations before income taxes      178.5    379.0  770.3  594.2  (748.1)  80.2  
Add (deduct) the following:
 Share of loss (income) of 
  associated companies               (12.1)   (20.5)   8.9    (.3)    5.9   (4.9)
 Amortization of capitalized
  interest                             3.8      2.2     -      -       -      -
                                    ------   ------ ------ ------  ------ ------
    Subtotal                         170.2    360.7  779.2  593.9  (742.2)  75.3
                                    ------   ------ ------ ------  ------ ------

Fixed charges per above               92.3    136.6  181.8  225.4   291.7  315.8
Less interest capitalized during
  the period                          (8.5)   (11.4)  (3.6)    -      -       -
                                    ------   ------ ------ ------ ------- ------
Total earnings (loss)               $254.0   $485.9 $957.4 $819.3 $(450.5)$391.1
                                    ======   ====== ====== ====== ======= ======

Ratio of earnings to fixed 
  charges                             2.75     3.56   5.27   3.63      *    1.24
                                    ======   ====== ====== ====== ======= ======
</TABLE>


* Earnings for the year ended December 31, 1997 were inadequate to cover fixed
  charges by approximately $742.2 million.