Outsourcing giant EDS has released disappointing first-quarter figures showing slower growth and fewer contract wins than the previous quarter.

Sales for the first three months rose three per cent to $5.2bn (£2.6bn), compared with seven per cent to $7.6bn (£3.8bn) at the end of last year.

And after adjustments for currencies, acquisitions and divestments, organic growth drops even lower to just one per cent.

The company signed new contracts totalling $3.4bn (£1.7bn) for the quarter, compared with $10bn (£5bn) last year when it announced major deals with General Motors and the US Navy.

But the flat figures are not all bad news for EDS, says Ovum analyst Phil Codling.

‘The minimal revenue growth performance is as expected, although the signings tally appears to be low,’ he said. ‘The

detail does not suggest that overall improvements in EDS’s performance have come to a halt.

‘The firm is maintaining its contract signings goal for the full year at $23bn (£11.5bn), indicating confidence in the pipeline.’

But the relative dearth of new signings supports the view that the global outsourcing market is weakening, says Codling.

And Europe’s performance is of particular concern because sales are down nine per cent to $1.4bn (£700.6m).

‘As the growth effect of the Defence Information Infrastructure mega-deal with the Ministry of Defence has waned, the business has not yet signed enough new deals to fill in and maintain momentum,’ said Codling.