Advertisement
YOU ARE HERE: LAT HomeCollections

EDS Earnings Dive; Firm to Cut 5,700 Jobs

October 31, 2002|From Bloomberg News

PLANO, Texas — Electronic Data Systems Corp. on Wednesday said it will fire about 5,700 workers and sell business units to raise cash after third-quarter profit fell 59%. Its shares rose as much as 15%.

The company's net income dropped to $86 million, or 18 cents a share, from $212 million, or 44 cents, a year earlier. Sales fell 2.8% to $5.41 billion from $5.56 billion.

EDS signed about $3 billion in new contracts, less than it expected and down from $6.8 billion a year earlier, Chief Executive Richard Brown said on a conference call with analysts.

Customers cut the size of contracts with EDS or didn't purchase additional services, and some European contracts produced less revenue than the company expected. Profit also was hurt by the bankruptcies of US Airways Group Inc. and WorldCom Inc. and by a loss on the sale of a unit that processes magazine orders.

The company's shares rose as high as $15.85 in extended trading after the release. Earlier they fell 19 cents to $13.75 in New York Stock Exchange composite trading.

The world's second-largest seller of computer services said it will cut as many as 5,680 jobs, starting with 800 to 1,000 jobs by year-end. EDS employs about 142,000 people.

Advertisement
Los Angeles Times Articles
|
|
|