Onetime Gains Boost Bottom Line For EDS
The IT services firm says 2Q revenue rose 4%, and the sale of its product-life-cycle-management software unit put it into the black for the quarter.
EDS on Wednesday reported a second-quarter revenue gain of 4% and net income of $270 million, though the profits came from the sale of its product-life-cycle-management software business.
Revenue for the quarter ended June 30 was $5.24 billion and net income was $270 million, or 54 cents per share--but without the onetime events, the IT services firm posted a loss of $16 million, or 3 cents per share. That compares with earnings of $88 million, or 18 cents per share, in the year-ago quarter.
Contract signings during the quarter increased 25% to $4 billion on the strength of several major deals--including an eight-year, $1.1 billion agreement with Bank of America. Still, the services firm faces numerous challenges. Earlier this month, Moody's Investors Service lowered its rating on EDS's debt to junk-bond status and EDS lowered its cash-flow estimate for 2004, citing ongoing delays with the buildout of an intranet for the Navy and Marine Corps.
In a research report published Wednesday before the release of EDS's earnings, Schwab Soundview analyst Cindy Shaw said, "The negatives outweigh the positives."
About the Author(s)
You May Also Like
How to Amplify DevOps with DevSecOps
May 22, 2024Generative AI: Use Cases and Risks in 2024
May 29, 2024Smart Service Management
June 4, 2024