EDS scrapes to profit
Skin + teeth...
Services behemoth EDS scraped to a profit yesterday, making profits of $8m in the third quarter against a loss of $153m in the same period last year. The firm signed contracts worth $5.3bn, up 83 per cent on last year's quarter. It also announced the imminent management buyout of its consulting arm, AT Kearney.
Revenue for the period was $4.87bn, up three per cent on last year. Organic revenue, excluding currency changes and acquisitions was flat. Third quarter non-General Motors revenue was $4.44bn.
Revenues in the Americas were flat at $2.29bn but profits were up 10 per cent to $375m helped by the Financial Services and Transport divisions.
Sales in Emea were up six per cent to $1.48bn thanks mainly to a contract with the UK MoD. Asian Pacific revenues were up one per cent to $347m but profits fell nearly 30 per cent to $33m, "due to investments and unfavourable change in portfolio mix".
EDS's ill-fated contract with the US Navy - the Navy Marine Corps Intranet - is still costing the firm dearly. Last year EDS wrote off $500m in wasted assets. This year EDS lost $11m on the contract despite it bringing in $208m in revenues.
The company also announced it is in talks to sell AT Kearney to its managers. No financial details have been disclosed although the two hope the deal will close before the end of the year, subject to usual regulatory and shareholder approval. The two companies would continue to work closely together.