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EDS meets estimates
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July 27, 2000: 5:09 p.m. ET
Computer service firm's second-quarter revenue rises 7 percent
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NEW YORK (CNNfn) - The computer services firm EDS reported second-quarter earnings and revenue that were in line with analysts' lowered expectations, after the Plano, Texas-based company issued a revenue warning last month.
EDS announced after the market closed Thursday that its second quarter net income rose to $254.3 million, or 53 cents per share, from $240.6 million, or 48 cents, in the same period last year. The earnings per share figure was even with what analysts had expected for the quarter, according to earnings estimate tracker First Call.
Second-quarter revenue rose 7 percent, not including the impact of divestitures and acquisitions. When those items are included, the company's revenue remained flat at $6.2 billion.
EDS (EDS: Research, Estimates) stock closed Thursday down 1/4 at 40-7/16.
EDS warned on June 9 that it expected to report "soft" second-quarter revenue -- news that hurled its stock down nearly 24 percent. The computer services provider said at the time that its earnings would match Wall Street's estimates for the quarter and full-year 2000. In June, EDS said that its second-quarter revenue growth would be in the low single digits, as opposed to previous forecasts of revenue growth in the mid-single-digit range.
During the second quarter, EDS signed more than 1,100 contracts totaling $6.1 billion, a record for a sixth straight quarter. The company said that its signings were strong across its four lines of business and across geographic regions. Its "E.solutions" division had almost $600 million in contract wins in the quarter and more than $1 billion in wins in the first half of 2000.
"Our revenue grew 7 percent on an organic basis this quarter," said Dick Brown, EDS chairman and CEO, in a news release. "We are confident EDS' revenue performance will improve in the second half of the year and beyond."
The company's operating margin rose to 9.5 percent in the second quarter, from 7.7 percent in the year-ago period and 8.3 percent in the first quarter of 2000. It was the fifth straight quarter in which EDS has recorded comparable year-over-year improvement in operating margin. 
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