EDS Reports Sales Increase, Says Cash Position Improved
New contract signings were up, driven by what EDS said was increased activity in the government and manufacturing sectors.
Using a new accounting method, IT-services company EDS Wednesday reported earnings, excluding onetime charges, of 5 cents per share on net income of $26 million for the third quarter ended Sept. 30. Revenue for the period rose 6% to $5.24 billion.
EDS now counts as revenue only what's actually been paid by a customer. Under its previous accounting system, the company estimated revenue based on the percentage of work it had completed on a contract. In last year's third quarter, when it used the old system, the company posted net income of $86 million, or 18 cents per share. EDS said it would have posted a loss of $88 million, or 18 cents per share, in the July-September period of 2002 if the new accounting rule had been in effect.
New contract signings for the period totaled $3.4 billion, compared with $3.0 billion a year ago, driven by what EDS said was increased activity in the government and manufacturing sectors. For the nine months ended Sept. 30, new signings totaled $9.7 billion, compared with $16.4 billion in the comparable period a year ago. Revenue from General Motor Corp.--EDS's largest customer--declined 7% from a year ago to $546 million.
EDS said its liquidity position improved in the third quarter, as it ended the period with $2.6 billion in unrestricted cash and securities. The company has been suffering a cash crunch of late because of large up-front costs associated with several major contracts, including the build-out of an intranet for the Navy and Marine Corps.
Looking ahead, EDS said it's on track to meet its second-half earnings guidance of 17 cents per share.
5 Top Federal Initiatives For 2015As InformationWeek Government readers were busy firming up their fiscal year 2015 budgets, we asked them to rate more than 30 IT initiatives in terms of importance and current leadership focus. No surprise, among more than 30 options, security is No. 1. After that, things get less predictable.