EDS issues profit warning on United bankruptcy
Plane leasing wheeze not so clever after all
EDS said it now expects full-year earnings to be between $2.00 and $2.05 per share compared to its earlier revised guidance of $2.05 to $2.10 per share.
The news follows a turbulent few months for EDS, which has seen the company issue a shock profit warning in September, followed by a slew of concerns surrounding its business, including accounting procedures used in its outsourcing projects, which raised fears it would not have sufficient cash reserves to fund future large-scale deals, as well as losses worth millions of dollars it incurred from other high-profile client bankruptcies of WorldCom and US Airways.
EDS also lost out as the primary contractor on one of the largest ever outsourcing engagements last month, a $7bn 10-year project with consumer products giant Proctor & Gamble.