EDS Earnings Up In Third Quarter
Amid the swarm of E-business service providers reporting low or negative net income for the third quarter, EDS (stock: EDS) on Thursday saw its net earnings for the quarter, which ended Sept. 30, nearly double from the same period a year ago, from about $158 million to more than $278 million. Earnings per share were 59 cents, an increase of 16% over 51 cents a year ago.
During the quarter, EDS signed customer contracts totaling $6.2 billion, the seventh consecutive quarter that signings reached record highs. Revenue for the quarter increased modestly to about $4.75 billion, from about $4.71 billion in the third quarter of 1999.
Non-General Motors Corp. revenue grew by 5% in the third quarter, but GM revenue was down 4% for the quarter. While GM-based revenue has been on a slide throughout the first three quarters of 2000, EDS expects to reverse this trend in 2001 by continuing to pursue E-business contracts with the automaker, says Myrna Vance, EDS's VP of investor relations. EDS, for example, provides technology and staffing support for GM's OnStar global-tracking call centers.
EDS is weathering the storm that many service providers have faced during the third quarter of 2000, as the services market was hit by faltering dot-com clients, a weak European market, and the demand for more complex E-business-enabling service offerings. Gary Helmig, a managing director for Wit SoundView Financial Group, says the company is poised for continued growth because of the potential that E-business-enabling services offer the market.
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