EDS Refocuses Amid Falling Profits; Services Help CA - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


EDS Refocuses Amid Falling Profits; Services Help CA

EDS yesterday reported revenue of $4.3 billion for the firstquarter, compared with $3.9 billion for the year-agoquarter, and a net loss for the quarter of $20.6 million,compared with $184.2 million in net income for the samequarter a year ago. The IT services provider took a $379.8million pre-tax charge in the first quarter to account for5,200 layoffs that will be completed by June, consolidationof operations, write-down of assets, and discontinuance ofsome lines of business.

To turn the company around from a long string of earningsand revenue growth disappointments, EDS executives outlineda $1 billion cost-cutting effort and a new business strategyemphasizing E-business services. A new unit focused on E-business has been created by bringing together a number ofservice offerings from throughout EDS. E-business offeringsinclude EDS outsourcing and subsidiary A.T. Kearney'sconsulting services, and range from Web design to onlinefinancial transaction processing and security. Prior toreleasing results, EDS slipped 1-13/16 to 51-5/16.

Also yesterday, Computer Associates said it expects recordrevenue for its fourth quarter, ended March 31, and an 11%revenue increase over last year for its fiscal year 1999.Revenue in the fourth quarter is expected to be about $1.63billion, up from $1.47 billion the same time a year ago. Its1999 annual revenue is estimated to be $5.25 billion,compared with $4.72 billion reported in fiscal year 1998.

CA president and chief operating officer Sanjay Kumarpointed to strong growth in CA's client-server business,which is driven by its Unicenter TNG enterprise-managementproduct line. Kumar also noted a healthy increase in thecompany's professional services revenue. The results arepreliminary in nature, pending completion of CA's regularyear-end audit; full results are scheduled for release on orbefore May 28, the company said. Before making the pre-earnings announcement, CA closed up 2-7/16 to 42-3/8.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
What Becomes of CFOs During Digital Transformation?
Joao-Pierre S. Ruth, Senior Writer,  2/4/2020
Fighting the Coronavirus with Analytics and GIS
Jessica Davis, Senior Editor, Enterprise Apps,  2/3/2020
IT Careers: 10 Job Skills in High Demand This Year
Cynthia Harvey, Freelance Journalist, InformationWeek,  2/3/2020
Register for InformationWeek Newsletters
Current Issue
IT 2020: A Look Ahead
Are you ready for the critical changes that will occur in 2020? We've compiled editor insights from the best of our network (Dark Reading, Data Center Knowledge, InformationWeek, ITPro Today and Network Computing) to deliver to you a look at the trends, technologies, and threats that are emerging in the coming year. Download it today!
White Papers
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll