NEW YORK - Electronic Data Systems, the world's No. 2 technology services company, reported an 80 percent increase in quarterly profit on Friday as new contract signings in the Americas helped boost revenue. Shares of EDS, which provides services including maintaining the operations of a client's communications infrastructure or developing applications software, were up 72 cents or 3.4 percent to $21.70 in afternoon trade on Friday on the New York Stock Exchange. Third-quarter net income for the Plano, Texas-based company was $225 million, or 42 cents per share, up from $125 million, or 24 cents per share, a year earlier. Revenue increased to $5.63 billion from $5.29 billion. Analysts on average had forecast earnings of 41 cents a share on revenue of $5.7 billion, according to Reuters Estimates. EDS, which ranks second in the information technology services industry by revenue after IBM, said it signed $5.7 billion in contracts in the quarter, up from $3.5 billion in orders a year before. The 2007 signings were led by government and financial industry deals. "Overall, across all of our vertical markets, government, financial services continue to be the strongest. We had eight deals with the (total contract value) greater than $100 million," said Chief Executive Ron Rittenmeyer on a conference call with analysts. In the Americas region, revenue rose 2 percent to $2.63 billion, and operating profit was $425 million, up 8 percent, EDS said. Looking ahead, EDS said it sees full-year 2007 revenue in a range of $22.0 billion to $22.5 billion, with adjusted earnings per share at $1.55 to $1.60. According to Reuters Estimates, analysts on an average have been expecting the company to report revenue of $22.3 billion and EPS of $1.57 for the same period. The company added that it expects about 20 percent of 12,000 U.S. employees offered early retirement to have accepted by the time all deadlines pass. It announced in September that it would offer the buyouts to about a quarter of its domestic work force, as it tries to cut costs. It sees a fourth-quarter earnings charge associated with the move at about $145 million, or 17 cents a share. It sees adjusted profit per share in the period of 55 to 60 cents, excluding the charge. EDS has been boosting profit by cutting costs, including 5,000 jobs last year, and generating revenue from contracts including a $3.9 billion deal from the U.S. Navy last year. By: Franklin Paul Copyright 2007 Reuters. Click for Restrictions As per CMP's agreement with Reuters, this story will be removed from this site after 30 days. |