Delays and cost overruns associated with its build-out of a massive intranet for the Navy and the Marine Corps helped push EDS to a loss of $126 million for its first quarter ended March 31. A year ago, EDS posted net income of $354 million. Revenue grew 2% year over year to $5.4 billion.
Despite problems with the $6 billion intranet project, the services firm says it still believes the contract will ultimately produce more than $1.9 billion in cash flow from 2004 onward.
EDS says a $48 million pretax charge to cover severance payments to outgoing CEO Richard Brown also contributed to the loss.
The Business of Going DigitalDigital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.