EDS reports third-quarter gains

CMS awards EDS a $41M task order

EDS reported third-quarter 2006 adjusted net income of $128 million, or 24 cents per share. That was up from the third-quarter 2005 adjusted net income of $70 million, or 13 cents per share.

EDS said in a statement that the adjusted net income and earnings per share include the effect of expensing stock options and performance-based restricted stock units.

The company said third-quarter revenue was $5.29 billion, an increase of 9 percent, or 6 percent on an organic basis, which excludes the impact of currency fluctuations, acquisitions and divestitures, from $4.87 billion in third-quarter 2005.

The Plano, Texas-based integrator said it signed $3.5 billion in contracts in the third quarter of 2006, compared with $5.3 billion in the same quarter a year ago. They included contracts with Delphi, Visanet, Dollar Thrifty Automotive Group, the Centers for Medicare and Medicaid Services, and the Army. For the first nine months of 2006, contract signings totaled about $18.9 billion, a 28 percent increase over the year-ago period, the company said.

“EDS posted another solid quarter reflecting improved execution on contracts, increased productivity and better management of overhead costs,” said Mike Jordan, EDS chairman and chief executive officer, in the announcement. “We are confident in our ability to deliver on full-year 2006 guidance, and investments in our technology platform and Best Shore capabilities position us well for 2007.”

EDS’ third-quarter 2006 operating margin was 4 percent on an adjusted basis, compared with 2.4 percent in the year-ago quarter.

“In the third quarter, we achieved continued year-over-year improvement in operating margin, while maintaining an aggressive level of investments aimed at improving our future cost structure and providing competitive market offerings,” said Ron Vargo, EDS’ chief financial officer.