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EDS expects sharp Q3 earnings drop

EDS expects sharp Q3 earnings drop

Electronic Data Systems, the world's second largest provider of IT services, expects to report earnings that are way below its expectations for its third fiscal quarter, the company announced on Wednesday after the close of financial markets in New York.

EDS expects its revenue to come somewhere between $US5.3 billion to $US5.5 billion, 2 to 5 per cent lower than the revenue in last year's third quarter. EDS had expected to post revenue growth in the 4 to 6 per cent range, the company said.

EDS is blaming the expected bad result on sagging sales, increased internal spending and asset writedowns related to the US Airways Group bankruptcy in August, among other things.

"I am deeply disappointed with our results for the quarter," EDS chief executive officer and chairman Dick Brown said in a statement.

The company expects the problems to last for the remainder of the year and into 2003. It expects fourth-quarter revenue to fall between 3 and 7 per cent in comparison to last year's fourth quarter.


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