EDS posts delayed Q3 results

Services provider Electronic Data Systems (EDS) on Monday reported a net loss of US$153 million, or US$0.30 per share, for the third quarter of this year. The report had been delayed multiple times as the company grappled with accounting issues.

The loss was affected by an asset impairment charge of US$375 million, or 46 cents per share, associated with EDS's Navy Marine Corps Intranet (NMCI) project. The NMCI contract was awarded in 2000 but has been plagued by delays and has drained cash from EDS.

Also on Monday, the company announced it has restated results for the third and fourth quarters of 2003. Its outside auditor, KPMG, recommended the restatement to reflect a more appropriate allocation of quarterly bonus plan accruals, money that EDS sets aside and accrues as an expense for the purpose of bonuses it pays later to employees, the company said.

At the same time, EDS announced that its own internal Audit Committee had completed an investigation of the accruals and other adjustments and found that there had been no improper activities or conduct connected with them. EDS has now completed its restatements, according to spokesman Terry Balluck.

The third-quarter 2004 loss reported Monday compares with a restated net loss of US$16 million, or US$0.03 per share, in last year's third quarter.

Revenue in the quarter was US$4.95 billion, down 1 percent from US$5 billion a year earlier. EDS signed US$3.3 billion worth of contracts in the quarter, up 4 percent from US$3.2 billion in last year's third quarter.

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