EDS yesterday reported $53m net income for the three months to December 31, reversing last year’s $337m loss, while sales fell 4.7% to $5.25bn.
The company reported earnings per share of $0.10, up from a loss per share of $0.70.
New contract signings fell $3.8bn from $4bn, as some deals EDS had expected to close during the quarter were pushed back into the current trading period.
Company chief executive Michael Jordan said while new business had fallen short during the quarter, EDS was off to a solid start in 2005.
For the full year, EDS reversed a $1.69bn loss, reporting a profit of $158m on sales that grew at 0.25% to $20.6bn. EPS came in at $0.40, up from last year’s loss of $3.55.
EDS succeeded in throwing a damper on the good news by predicting a coming year that fell below Wall Street’s expectations. The company expects full-year revenue of between $20bn and $21bn with EPS between $0.50 and $.060. Financial analysts were predicting a profit of $0.73 per share on revenue of $20.16bn.
Jordan blamed the lower-than-expected outlook to a difficult business climate and the company’s plan to make $1bn of investments in so-called growth initiatives. EDS last month announced plans to spend $450m on a joint venture with Towers Perin.
For the next quarter, EDS expects revenue between $4.8bn and $5bn with an EPS ranging between $0.00 and $0.05.
