Updated from 4:53 p.m. EST
Electronic Data Systems
beat the Street's forecast for its third-quarter profit late Wednesday, as revenue rose to land essentially in line with Wall Street's expectations.
Shares added 2 cents to $25.67 in after-hours trading.
EDS said its net income was $125 million, or 24 cents a share for the third quarter, compared with $8 million, or 2 cents a share, in the same quarter for 2005.
Excluding certain items, the company earned $128 million, or 24 cents a share, up from $70 million, or 13 cents a share, in the same period a year ago. On that basis, EDS beat the consensus estimate by 4 cents.
On the top line, EDS reported $5.29 billion, rising from $4.87 billion in the same period a year ago. Analysts polled by Thomson First Call had forecast $5.33 billion in sales.
The company said it signed $3.5 billion in contracts for the quarter vs. $5.3 billion in the comparable period last year. But for the first nine months of the year, total contract signings were $18.9 billion, up 28% by the same measure in 2005.
The government sector posted the largest jump in sales, percentage-wise, with revenue of $895 million, growing 27% from a year ago, helped by the company's Navy Marine Corps Intranet contract.
The Asia-Pacific region grew 12% to $389 million, boosted by revenue from its India-based Mphasis arm. EDS recently
increased its ownership stake in the company by 20%.
Still, the largest breadwinners for the company were the Americas, which posted $2.34 billion in sales, up 2% year-over-year, and the Europe, Middle East and Africa segment at $1.54 billion, growing 4% over the prior year.
Free cash flow was $171 million, compared with $440 million in the same period last year.
For the fourth quarter, the IT services and consulting company anticipates an EPS of 33 cents to 38 cents on revenue of $5.5 billion to $5.7 billion. Wall Street had pegged the company to hit the high end of the forecast at 38 cents a share. Analysts expect $5.53 billion on the top line.
EDS narrowed its revenue range for the full year to between $21.1 billion and $21.3 billion. EPS will be between 83 cents and 88 cents, the company said. First Call had expected earnings of 84 cents a share on sales of $21.13 billion.
"EDS posted another solid quarter reflecting improved execution on contracts, increased productivity and better management of overhead costs," Mike Jordan, EDS chairman and chief executive officer said in a statement. "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."