I've been skeptical of Electronic Data Systems'
In the fiscal fourth quarter, revenues increased 11% to $5.7 billion. Contract signings added up to $7.6 billion, which compares to $5.3 billion in the same period a year ago. Some of EDS's new customers include biggies like Vodafone Group
Founded in 1962, EDS is now a global IT powerhouse, helping companies build call centers, claims processing systems, and back-office operations. The contracts are long-term and have big price tags -- in some cases, more than $100 million.
Several years ago, EDS was on the verge of implosion because of a botched contract with the U.S. Navy. Since then, it has taken the necessary steps to right-size; these include building global data facilities, investing in sales, hiring offshore talent (especially in India), and streamlining overhead.
Of course, it hasn't been perfect. For example, Verizon
Going forward, EDS expects earnings of $0.17 to $0.22 per share in the first quarter, with revenues of $5.1 billion to $5.3 billion. As for the full-year forecast, earnings per share are expected to be $1.60 on sales of $22 billion to $22.5 billion.
These are good numbers, although there's a chance they'll be better. EDS is still focused on cost-cutting (and moving offshore), and is seeing lots of momentum in landing new customers. Instead of focusing on survival, now EDS can finally spend its time capitalizing on growth opportunities.
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