Fifth Straight Record-Breaking Quarter For EDS - InformationWeek

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Fifth Straight Record-Breaking Quarter For EDS

Boosted by steady growth as a provider of E-business services, EDS (stock: EDS) last week posted first-quarter revenue of $4.5 billion, a 5% increase over $4.3 billion in the quarter a year earlier. First-quarter earnings per share were 47 cents, a 31% increase from 36 cents in 1999.

The uptick is likely to continue as EDS also disclosed $4.5 billion in new contracts, representing the fifth straight quarter of record signings and a 50% increase in signings from the same period last year. There were 847 contract signed in the first quarter, ended March 31, most notably in the company's E.solutions group, which accounted for more than 300 new deals. Overall revenue for the E.solutions group grew 35% from the first quarter of 1999, with the group's $500 million in contract signings accounting for more than 11% of total signings for the quarter.

EDS plans to prune less-productive areas of its business, continuing an aggressive cost-cutting and restructuring plan begun last year, says Dick Brown, EDS chairman and CEO. "We will grow, but not at any cost," he says. "We will meet our goals for revenue growth this year."

Brown also points out that EDS's success in the first quarter came without the benefit of a megadeal, such as the $6.4 billion contract the company signed with MCI WorldCom during the fourth quarter of 1999. According to Gary Helmig, a managing director for Wit SoundView Financial Group, this means that EDS is likely to surpass last year's earnings.

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