EDS, Profits, Contracts, Quarter

EDS shows signs of recovery

EDS has reported gains in both its first-quarter profit and revenue, suggesting that the restructuring undertaken by the company over the past three years is beginning to bear fruit.

First-quarter net profit rose six-fold to $24 million (£13.2 million) from $4 million in last year's first quarter, on revenue up 10% at $5.1 billion. In its last financial year, EDS reported net profit down 5% on flat revenue figures.

Commenting on the first quarter, company chairman and CEO Mike Jordan said: "EDS posted solid financial performance in the quarter and continued to make progress on investment initiatives."

The company signed $10 billion worth of contracts in the quarter, up 45% on last year, and said its second quarter started well with contracts including a $1.7 billion IT infrastructure services agreement with Kraft Foods. Under the terms of this contract, 670 Kraft employees globally will transfer to EDS, with EDS taking responsibility for the company's IT infrastructure and services, and working with its Agility Alliance partners to develop a flexible platform for Kraft's business.

EDS said revenue across all its regions rose in Q1, with EMEA up 16% at $1.6 billion, the Americas up 3% at $2.3 billion and Asia-Pacific up 8% at $327 million.

Looking forward, the company forecast second-quarter revenue of $5-5.2 billion and full-year revenue of $20-20.5 billion.