A new accounting procedure has blunted positive quarterly figures for IT services group EDS.
The NYSE-listed company posted pro forma net income of $35m (£18.4m), but the impact of stock option expensing – which it adopted from 1 January – contributed to a final net income of $4m. However, the adjusted figure was still better than its Q1 2004 loss of $12m.
Total quarterly revenue was $4.94bn, down 5% on Q1 2004, but still at the higher end of estimates.
‘EDS got off to a solid start in 2005, as our operational improvements continued to gain traction,’ said chairman and CEO Mike Jordan. ‘In an increasingly competitive market, we posted our strongest signings quarter since 2002 while continuing to invest in our capabilities. At this point we believe EDS is on track to deliver on our long-term turnaround goals.’
Contract award highlights during the quarter included its $3.85bn deal with the MoD.
It also expects to post a pro forma 2 to 7 cents per share loss for the year, due mainly to the adverse affect of a previously-disclosed one-time pension charge related to the loss of the Inland Revenue IT contract in its UK operations.
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