(Corrects to show that analysts' 1Q estimates included stock-option expenses.)
LOS ANGELES (AFX) - Electronic Data Systems Corp. late Tuesday reported first-quarter profit that surged sixfold while revenue rose about 7% to outpace expectations, as the consulting and computer services giant made more progress on its turnaround.
EDS said it signed $10 billion in contracts during the three-month period, up 45% from $6.9 billion in the same period last year. It also reiterated its prior financial forecast.
Net income for the period ended March 31 climbed to $24 million, or 5 cents a share, from $4 million, or 1 cent, a year earlier. The results, which included expenses related to employee stock options, fell short of the average estimate of analysts surveyed by Thomson First Call, who expected 8 cents a share on that basis.
Without the option-related expenses and results from discontinued operations, the company would have earned $69 million, or 13 cents a share, up from $42 million, or 8 cents, a year earlier.
Revenue for the period rose 7.2% to $5.08 billion, more than the $4.8 billion analysts were expecting, from $4.74 billion.
Ron Vargo, interim co-chief financial officer, said the company continues to improve its performance on major contracts, including a large deal with the U.S. Navy that had been mired in losses in the past. He said the firm also continues to improve its efficiency in delivering services.
The company continues to forecast a net profit for the year of 83 cents to 93 cents a share, or $1.05 to $1.15 without option expenses. EDS put revenue for 2006 at between $20 billion and $20.5 billion.
On average, analysts' current estimates call for a yearly profit of 89 cents a share including option expenses on revenue of $20.17 billion.
EDS expects a net profit for the current second quarter of between 12 cents and 17 cents a share on revenue of $5.0 billion to $5.2 billion. After stripping out the effect of options, the company put its quarterly profit at 17 cents to 22 cents a share.
The current average estimate calls for a second-quarter profit of 18 cents a share on revenue of $5.08 billion.
EDS shares eased 1% in evening trading to change hands at $27.35 following the results. The stock closed the regular session at $27.62. This story was supplied by MarketWatch. For further information see www.marketwatch.com.