| | Electronic Data Systems
has reported a six-fold
increase in profit for
its first quarter, while
revenues rose about 7%
to beat analysts'
forecasts. The IT
services provider won
major contracts during
the quarter, making more
progress on its
turnaround.
Net income for the
quarter ended 31 March
reached $24m, or five
cents per share, versus
net income of $4m, or 1
cent per share, in
corresponding quarter
last year.
The results, which
included expenses
related to employee
stock options, fell
short of the average
estimate of analysts
surveyed by Thomson | |
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| | contracts for the
company," said Mike
Jordan, EDS chairman and
chief executive officer.
In February, Jordan
declared that EDS had
completed its turnaround
plan and had turned its
focus to growth.
EDS signed
significant first
quarter contract
renewals and extensions
with General Motors for
$3.6bn, and the US
Department of the Navy
for $3.9bn.
In total, EDS signed
$10bn in contracts in
the first quarter, up
45% from $6.9bn in the
same quarter in 2005. A
$1.7bn IT infrastructure
services agreement with
Kraft Foods will
contribute toward the
second quarter results. | |
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| |
By segment, revenues
from US Government work,
including NMCI,
increased 28% to $840m,
and operating profit
increased to $90m for
the quarter, up $73m on
the same period last
year. This was
primarily due to
improvements in the NMCI
contract and the impact
of the contract
extension.
Growth in EDS' EMEA
business also
contributed to the
quarter's results.
Revenue from the regions
was $1.6bn, up 16% pm on
the previous year,
driven mainly by the
company's UK Ministry of
Defence contract, signed
in March 2005. Operating
profit increased 29% to
$182m, up from $142m in | |
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| | 2005. This was driven
primarily by
productivity, growth and
a contract settlement,
partially offset by
development costs
associated with the UK
Ministry of Defence
contract.
The company left its
full-year forecast
unchanged. It continues
to forecast a net profit
for the year of 83 cents
to 93 cents a share, or
$1.05 to $1.15 without
option expenses. EDS put
revenue for 2006 at
between $20bn and
$20.5bn. On average,
analysts' current
estimates call for a
yearly profit of 89
cents a share including
option expenses on
revenue of $20.17bn.
| |
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| | First Call, who expected
eight cents a share on
that basis.
Otherwise, pro forma
first quarter net income
was $69m, or 13 cents
per share, versus $42m,
or eight cents per
share, from a year ago.
Revenue for the
period rose beyond the
$4.8bn analysts were
expecting to reach to
$5.08bn, up from $4.74bn
from a year ago.
"EDS posted solid
financial performance in
the first quarter and
continued to make
progress on investment
initiatives, while
securing two landmark | |
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