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The restructuring of problem contracts along with initiatives to lower costs helped EDS return to profit in the first quarter of 2005 — despite an ongoing fall in revenues.
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| Consulting-Times E-zine
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Consulting subsidiary A.T.Kearney saw revenues fall 12%, which explains why management buyout rumours have surfaced in the last months.
EDS reported a net income of $4m, or 1 cent a share, in the first quarter — compared to a loss of $12m, or 2 cents a share previously. Revenues stood at $4.94bn, down 5 per cent – while organic revenues declined by 8 percent.
A.T.Kearney, the management consulting subsidiary, posted an $11m operating loss on revenues down 12 per cent to $204m.
Mike Jordan, chief executive, said EDS “got off to a strong start” to the year and remained “on track to deliver on our long-term turnaround goals”.
The group won new business of $7.1bn in the quarter, up from $3.8bn, including a previously announced $3.85bn contract with the UK Ministry of Defense. Excluding the MOD deal, the value of new contracts declined by 19 per cent.
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