EDS said it is making good progress boosting its business in the US, as it reported a modest rise in profit for its latest financial quarter.
The services giant posted a profit of $240.6 million, or 48 cents a share, for its second quarter ended 30 June 1999, up 8.4 per cent from the year earlier period.
Revenue for the quarter was $4.6 billion, up around 10 per cent from $4.2 billion during the same quarter in 1998.
Earlier this week, EDS said it is offering early retirement to up to 8,000 of its US employees in a bid to streamline its workforce. see yesterday's story
Dick Brown, chairman and chief executive of EDS boasted about the $5.7 billion new contract sales during the quarter: "While it's still early in the process, we are pleased with the progress EDS made in the second quarter, especially in new contract sales in the US."
"As our new business model evolves, we will continue to improve and to deliver our clients the proven processes, innovation and electronic business skills to help them perform better for their customers," he said.
EDS' new business unit E.solutions is focused on the $200 billion electronic business marketplace. The company said that new contract sales in the electronic business marketplace represented 14 per cent of the total.
Lionel Lamy, senior research analyst at IDC said: "This is a huge market and everybody is stepping in, including rival IBM, but EDS has got a good chance as they have a lot of muscle. However, it is something to state and another thing to deliver."
The US showed to be a fast growing marketplace with 75 per cent of new contract sales coming from that area.
Lamy said that this was good news for EDS: "Growth in the US is their main problem and they want to reignite growth there. With 60 per cent of revenues coming from the US, getting 75 per cent of new contracts from the US shows they are on track."
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