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10/25/2004
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EDS Delays 3Q Earnings

The delay is related to a problematic $6.9 billion contract to build an intranet for the Navy and Marine Corp.

EDS has postponed the release of its third-quarter earnings until Nov. 3 as it reevaluates assets related to its work on an intranet for the Navy and Marine Corps. EDS had been scheduled to release its earnings.

The company issued a statement saying that execs need time to evaluate the impact of a possible "impairment of assets" related to the seven-year, $6.9 billion deal intranet project. That suggests that investments the company has made in the project won't generate as much cash as originally estimated.

The contract has been plagued by delays and cost overruns. One Wall Street analyst who follows EDS says any writedown of assets related to the contract may mean that EDS may never break even on the contract.

The company reaffirmed its earnings guidance--five to 10 cents per share for the third quarter and revenue of $4.9 billion to $5 billion.

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