Electronic Data Systems
copped to a $153 million third-quarter loss late Monday, swollen by a $233 million writedown of a Navy computer contract that has caused repeated delays to its quarterly filings. EDS also confirmed that its auditors found problems with its financial controls, but said the issues have been addressed.
The company lost $153 million, or 30 cents a share, in the quarter, compared with a loss of $16 million, or 3 cents a share, last year. The Navy contract writedown widened the 2004 quarter's loss by 46 cents a share. Revenue fell 1% from a year ago to $4.95 billion.
Pro forma to exclude the writedown, restructuring charges, discontinued operations and other items, earnings were $57 million, or 11 cents a share, in the latest quarter, about a nickel better than estimates. EDS also said it expects to earn a pro forma 23 cents to 31 cents a share on revenue of $20 billion to $21 billion in all of 2004, roughly in line with forecasts.
In addition to its earnings, EDS said its auditors finished a review of the way it accounted for bonuses, finding two "material weaknesses" in the company's internal controls. The auditor told EDS to restate its results for each quarter of 2003 to fix the bonus misallocation and change the accounting of a transaction that resulted in $9 million of revenue being recorded in the third quarter of 2003.
"We moved quickly to deal with our auditor's questions and believe these issues are behind us. Now we can focus on building our business," the company said. EDS said full-year 2003 results weren't impacted by the changes.
The stock fell 32 cents, or 1.5%, to $21.64 in premarket trading.