EDS earnings halved in a year
With new contract signings down in an IT services market that company officials called “tepid”, beleaguered Electronic Data Systems (EDS) has reported second-quarter earnings that were less than half of what they were a year earlier. EDS reported net income of $US138 million for the quarter ending June 30, compared to $US316 million one year earlier. Excluding one-time charges such as asset write-downs and executive severance pay, earnings were $US167 million. Revenue for the quarter was $US5.52 billion, up 2 per cent from $US5.4 billion for the year-earlier period, but company officials noted that the higher figure for the 2003 quarter takes into account the weak dollar, and that revenue was down by 3 per cent in constant-currency terms.
WorldCom accused of avoiding access fees
WorldCom CEO, Michael Capellas, is vowing that the long-distance carrier will co-operate with a new investigation by the US Attorney’s Office into whether the company has avoided paying access fees to its rivals in recent years. Capellas said officials at the company, which is now operating under the MCI brand, met with members of the US Attorney’s Office and “committed to full co-operation in their efforts”. He also said the company is conducting an internal analysis of the matter, which arose from claims by competitors that MCI wrongly avoided paying millions of dollars in access fees to its rivals by rerouting long-distance calls to make them appear to be local calls. Published reports indicate that the probe follows complaints by MCI competitors that have much to gain. A hearing on WorldCom’s Chapter 11 bankruptcy status is scheduled for August 25.