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E.D.S. Profit Falls, But Still Tops ExpectationsFiled at 4:34 p.m. ET DALLAS (AP) Information technology services company Electronic Data Systems Corp. (NYSE:EDS) said Thursday its first-quarter profit was less than half what it was a year ago when it recorded a huge contract termination payment from Verizon. (NYSE:VZC) (NYSE:VZ) Results beat analysts expectations that were lowered after the company issued a warning in February, and shares rose sharply 8.3 percent, or $1.53, to $19.96. Plano-based EDS said it earned $62 million, or 12 cents per share, down from $164 million, or 31 cents per share, in the same period a year earlier. A contract termination payment from Verizon added $100 million to results in the year-ago quarter. Sales for the three months ended March 31 climbed 3 percent to $5.37 billion from $5.22 billion. Analysts, on average, had expected a profit of 5 cents per share on sales of $5.21 billion, according to a survey by Thomson Financial. "EDS first quarter contract signings performance was exceptional, particularly in light of uncertain global economic conditions," Ron Rittenmeyer, EDS chairman, president and chief executive, said in a statement. "EDS also got off to a strong start operationally with both earnings per share and revenue exceeding our previous guidance." EDS signed $5.6 billion in contracts in the first quarter, up 66 percent from $3.4 billion in the same period last year. Contracts included 12 that were worth $100 million or more, the most in any quarter since 2002. The biggest was a new $1 billion deal with Royal Dutch Shell PLC (NYSE:RDS A) in which EDS will manage 150,000 computer users in more than 100 countries. Rittenmeyer said the company had secured a $1 billion government contract that would close in the second quarter. He wouldnt discuss specifics. "All in all, Id say were very pleased with the level of signings," Rittenmeyer said in a conference call with analysts. Rod Bourgeois, an analyst with Sanford C. Bernstein & Co., said the EDS report was impressive on three fronts: the signings, beating expectations and boosting its 2008 outlook on revenue and per-share earnings. EDS said it expected full-year revenue in the range of $22.5 billion to $23 million a $500 million jump in its estimate, Bourgeois said and per-share earnings as high as $1.39, an increase of 4 cents. "I was pleased with the stock and pleased with the management commentary on the conference call," Bourgeois said. Tag CloudExternal InformationAdditional InformationViacom in Deal With YouTube Rival...OPEC Gathering Finds High Oil Prices More Worrisome Than Welcome... Financial Issues Lead the Market Lower... Suitor Ends Bid for Northern Rock... Where Am I?News Main Page - Business - E.D.S. Profit Falls, But Still Tops Expectations |
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