IT services provider, Electronic Data Systems (EDS), reported a steep loss in its fourth quarter, ended December 31, 2003, due in large part to a one-time write-off of costs related to its chronically problematic US Navy/Marine Corps Intranet (NMCI) contract.
EDS posted a net loss of $US354 million after writing down $US559 million in deferred costs related to the NMCI contract. It also recognised $US84 million in pre-tax restructuring charges and after-tax losses of $US7 million from discontinued operations, the company said.
The results compare with net income of $US360 million in 2002's fourth quarter.
Excluding those one-time items, net income came in at $US59 million.
Revenue rose 8 per cent to $US5.76 billion, helped by growth in IT outsourcing services.
Excluding the impact of currency fluctuations, revenue rose 2 per cent, EDS said.
EDS won the mammoth, multi-year NMCI contract in October 2000.
Valued at $US6.9 billion at the time of signing, it has been plagued by delays and controversies over its scope.
Last week, EDS said it was working with the Department of the Navy to "stabilise" the NMCI program by developing a more predictable and controlled base-by-base roll-out schedule.
The revised plan required the $US559 million write-down in the fourth quarter, the company said.
Other NMCI adjustments included a reorganised account team that now reports directly to EDS president and chief operating officer, Jeff Heller, and improved co-ordination with the Navy, EDS said.
Both EDS and the Navy remain committed to NMCI, according to EDS.
For the full year, EDS posted a net loss of $US1.70 billion, compared with net income of $US460 million 2002. Revenue rose 7 per cent to $US21.5 billion, or by 2 per cent excluding currency fluctuations.
The value of contracts signed fell in the fourth quarter to $US4.3 billion, from $US8.1 billion in the fourth quarter of 2002. For the full year, they fell to $US14 billion from $US24.4 billion.