The new star player at Electronic Data Systems ( EDS) -- CEO Michael Jordan -- is already struggling to score points with investors and customers. During a timeout meant to finalize earnings, EDS saw at least one analyst jump ahead and predict the final numbers for Jordan's first quarter of play. The results weren't pretty. Smith Barney analyst Patrick Burton, who already doubted Jordan's team could deliver on the promises made by past management, has grown even more pessimistic in recent days. In a research note issued Friday, Burton predicted that EDS might hit consensus estimates for the first quarter, but will drop the ball immediately afterward. Burton had already cast doubt on EDS's full-year earnings power, but he now believes the company will join him by shaving guidance when it releases its delayed financial update on Wednesday. "At its analyst day, CFO Bob Swan (then on the job for only a few weeks) had not indicated a great deal of confidence in the estimates," Burton pointed out. "We also believe that EDS' last public projections are too high." Current guidance, issued before former CEO Dick Brown got booted, calls for EDS to deliver full-year earnings of $1.80 to $2 per share. Wall Street, in general, was already looking for EDS to miss with full-year profits of $1.70 per share. But Burton has been particularly bearish, projecting that EDS can generate full-year profits of only $1.55 per share -- and warning, through his latest update, of challenges that can threaten even that modest performance. On Monday, EDS fell $1.06 to $17.98.
When calculating his guidance, Burton admittedly looked past a number of potential setbacks that could still materialize. For now, he is assuming that the American Airlines unit of AMR ( AMR) -- a major EDS customer -- won't file for bankruptcy protection and trigger write-offs like those accompanying the bankruptcy of rival UAL ( UAL). He also stopped short of predicting any further asset sales that could cut into earnings going forward.