EDS missed Wall St revenue estimates but trumped earnings forecasts when it turned in its swansong Q2 results yesterday.
The services company, which is due to be swallowed by HP in the next few months, turned in revenues of £5.6bn for the quarter ending June 30, up three per cent on the year. Wall Street analysts had been primed for revenues of $5.7bn.
Net income was $160m, up on last year’s $138m. This gave adjusted earnings per share of $0.33, well up on the $0.26 Wall Street had modelled.
The company put the profits overshoot down to “in part, lower than expected workforce-related costs”. Without these, it said, earnings per share would have been at the higher end of its own guidance of $0.24 to $0.27.
This throws up a slight mystery. Were workforce-related costs lower than expected because the company is getting even better at getting rid of people than it thought? Or are large numbers of workers choosing to jump now, rather than be borged into HP?
While figures were up overall, the firm’s Americas region showed revenues down six per cent on the year to $2.49bn, with profits down from $382m to $337m. Emea revenues were up three per cent to $1.89bn, with profits up from $272m to $293m, while AsiaPac profits grew 11 per cent to $588m, with operating profit up from $30m to $65m.
Normally at this point we’d point out how EDS’s forecast for the coming quarter and flouting of the analysts’ forecasts had sent its share price up, down, or spinning.
But of course with just weeks of “independence” left to go it didn’t deliver a forecast, and its share price was static, as its fate is already sealed. Goodbye EDS. ®