Electronic Data Systems Corp. Thursday announced that it beat its fourth-quarter earnings per share for 2000 by 16 percent at 81 cents a share, and it beat its full-year earnings per share by 17 percent at $2.68 cents a share.
The Plano, Texas, services behemoth also reported record revenues for its fourth quarter of 2001 and for the year with quarterly revenue at $5.9 billion and revenue for the year at $21.5 billion.
EDS earnings per share were above concensus by two cents a share, said Dick Brown, chairman and CEO, in a conference call with securities analysts. The results reflected the 11 consecutive quarters of double-digit earnings growth for the company.
Brown used the conference call to reiterate EDS straightforward accounting practices in response to concerns raised in the financial press.
"We have no undisclosed debt or liabilities. Our clients benefit from more favorable financing costs [as a result of the hardware financing EDS facilitates for its clients]. Lenders have no recourse to EDS except in the event of [EDS] non-performance," he said.
In the fourth quarter EDS signed $10.1 billion in new contracts as a result of a "tough sales environment" in the third and fourth quarters, according to Brown. For the year, new contract signings totaled $31.4 billion.
Brown said that EDS in the quarter also increased its sales force by 50 percent, or 250 employees, to reach a total of over 700. "We are in the strongest position in our history to capitalize on emerging opportunities worldwide," he said.
At the same time, EDS will continue to focus on productivity improvements as a part of its transformation in the way that it delivers services. "We will achieve another $1 billion in productivity improvements this year and improve our margins," he said.
Across its five business units, EDS A.T. Kearney high-end consulting practice continued to deliver weak results because of lower demand. Its revenues were down 12 percent for the quarter, but EDS expects to see some modest growth in the sector in the second half of this year.
EDS Information Solutions outsourcing unit grew by 15 percent, while eSolutions grew by 38 percent. Business process management grew by 17 percent, and financial process management grew by 30 percent.
For the coming year, EDS expects to track revenue growth with the growth of the IT services market, which is expected to grow between 13 percent to 15 percent.