`BASE BUSINESS' OPERATING REVENUES UP MORE THAN 35 PERCENT PLANO, Texas, July 19 /PRNewswire/ -- Spurred by accelerating global expansion and marked by new contract awards of more than $2.8 billion, EDS achieved continued strong double-digit earnings and revenue growth in the second quarter. The information technology company said it recorded a 15 percent increase in net income and a nearly 27 percent boost in total revenues. EDS, which is based in the United States and has operations in 41 countries, said that for the quarter ended June 30, 1995, net income rose to $226.9 million, compared with $197.3 million in the corresponding period last year. Second-quarter revenues increased to $2.962 billion, from $2.334 billion in the second quarter of 1994. New contract signings reached $2.81 billion in the second quarter, bringing to $5.46 billion the total in new contracts for the first half of 1995. EDS signed $9.08 billion in new business in all of 1994 -- the best year in the company's 33-year history. The earnings of EDS (Electronic Data Systems Corporation), a wholly owned subsidiary of General Motors Corporation, are used to calculate the earnings per share of General Motors Class E common stock (NYSE: GME). Second-quarter earnings per share increased $0.06, from $0.41 a year ago to $0.47 in 1995, a gain of nearly 15 percent. Business from sources outside General Motors continued to grow at a particularly rapid rate. EDS' "base," or non-G.M., operating revenues rose more than 35 percent over 1994 second-quarter figures. Non-G.M. revenues accounted for more than two-thirds of the EDS total in the first half of 1995. "EDS continues to seize new business opportunities by entering new markets and expanding into new industries and geographical areas," said EDS Chairman, President and CEO Les Alberthal. "Our recent joint ventures in Israel and South Africa are just two examples of EDS' broadening global reach as information technology emerges as an increasingly critical force in people's lives around the world." The second quarter was highlighted by the winning of two major contracts in Europe -- one with the Dutch national railway and the other with the United Kingdom's Department of Social Security -- and EDS' signing of a letter of intent to acquire A. T. Kearney, the prestigious, global management consulting firm. EDS and A. T. Kearney announced they had entered into a letter of intent under which EDS would acquire the Chicago-based firm and merge EDS' management consulting unit with A. T. Kearney. The transaction, if completed, would create a new EDS-owned management consulting subsidiary under the A. T. Kearney name. The combined EDS-Kearney unit would be one of the largest management consulting firms in the world, with more than 2,300 consulting professionals in more than 40 countries. It would provide EDS with enhanced ability to serve its rapidly growing client base in all major industries and geographic markets. In the Netherlands, EDS was selected by the national railway, Nederlandse Spoorwegen, to be the railway's preferred information technology (IT) supplier for the next 10 years. The agreement is the first outsourcing partnership in the European rail industry. And in the United Kingdom, the Department of Social Security (DSS) chose EDS to provide the agency with IT services. Under the 10-year agreement, EDS will be responsible for data center operations and technical support functions to the DSS, the largest IT services delivery organization in the U.K. government. Some 1,500 DSS employees will transfer to EDS. Also in the U.K., in the largest contract of its kind there in the area of local government, EDS was awarded an eight-year agreement to administer Brent Council's revenue and benefits service. The 240 Brent employees who ran the revenue collection and benefits administration processes and associated IT systems transferred to EDS in May. EDS is already a significant provider of services to the central government in the U.K., and this contract marked EDS' entry into the local government sector in that country. Elsewhere in Europe, EDS signed an agreement with Spain's first private-pay television channel, Canal+, to develop new client/server-based applications. The new system, to be called the Subscriber Management System, will give the broadcaster commercial information about its customers, allowing for cross-selling and better accounts-receivable management. Also in Spain, EDS was awarded a contract by Editorial Salvat, a major Spanish publisher. EDS will develop a CD-ROM-based multimedia encyclopedia. The CD-ROM technology will enable Salvat to move its product to market faster than with the traditional paper-based encyclopedia, making the information more current and giving Salvat a competitive edge. In France, EDS won a seven-year systems management contract with a subsidiary of Continental Can Corporation, Ferembal, a specialist in can production. EDS will implement and maintain new systems designed to improve administrative functions and optimize inventory levels. In Germany, EDS was selected to support the entire IT process for BDK Bucherdienst, a leading publisher. EDS will develop a client/server application for all of the publishing company's process chain. The new systems will give BDK up-to-date sales information and increased flexibility for improving customer satisfaction. Also in Germany, EDS was awarded a contract by the leading manufacturer of refractory materials, Didier. EDS will operate and maintain Didier's existing systems as well as develop new applications and migrate operations to a distributed environment. In Scandinavia, EDS signed an agreement with Norway's largest bank, Den norske Bank (DnB), to provide systems integration, systems development and management consulting services. The new systems will help DnB quickly develop and adapt products and services in response to changes in the financial services marketplace. This agreement is the first long-term contract in the Nordic market between a financial institution and an IT service provider. EDS began its relationship with the bank with a management consulting engagement. Meanwhile, the European Union, under the PHARE program (Poland and Hungary Assistance for the Reconstruction of the Economy), selected EDS to develop an environmental management system for the Czech Republic. Working with the Czech Hydrometeorological Institute and the Czech Ministry of Environment, EDS will implement a new system that will allow scientists and Czech policymakers direct access to the latest status regarding air quality. In Israel, EDS announced the formation of a joint-venture company with Kardan Technologies. The new company, which will do business under the name EDS Israel, will provide a full spectrum of IT services to the business and government sectors in Israel. In Saudi Arabia, EDS won a multi-year consulting agreement with Al Rajhi Bank of Riyadh. The bank has asked EDS to be its partner in a major process-reengineering study designed to help the bank establish a place as a major international financial force moving into the 21st Century. It is one of the largest contracts ever signed by EDS' Management Consulting Services. In Asia, EDS signed a nine-year agreement to provide Rank Xerox Hong Kong with information management outsourcing services and a new integrated information system based on client/server technologies. In Canada, EDS was awarded a five-year agreement with the Canadian Imperial Bank of Commerce, the country's second-largest financial institution. EDS will develop and support cash management systems that offer the bank's clients access to a full range of services by phone, fax or computer. In the travel industry, Continental Airlines and EDS unveiled E-Ticket -- electronic ticketing to expedite the airport check-in process. EDS designed and implemented E-Ticket and fully integrated the process into four of Continentals systems -- reservations, OnePass frequent flyer, credit management and revenue accounting. Also in the area of travel, EDS formed an alliance with Continental and AMADEUS to form a National Marketing Company (NMC) that will provide information management, marketing, distribution and customer support services to travel agencies in the United States, Mexico, Canada, Central America and the Caribbean. EDS owns one-third equity in the NMC and will provide systems management support to the new entity. In the manufacturing arena, EDS was awarded a systems management contract by Behr America, a manufacturer of complete cooling systems for the transportation market. EDS will install and operate several new systems and will implement an electronic mail system. EDS also will consolidate all IT processes and provide on-site support. In the U.S. financial services market, EDS signed a seven-year agreement with Home Savings of America to support the institution's new consumer lending operation. One of the nation's largest residential mortgage lenders, Home Savings will begin offering a full range of consumer loans including auto, home equity and personal unsecured loans. EDS will provide loan servicing support, including paperless application processing, customer service, loan payment distribution and delinquent payment collections. EDS strengthened its position in the global securities industry through the acquisition of FCI Incorporated, a management and IT services firm based in New York. The acquisition brings more than 100 securities industry experts to EDS. EDS won a 10-year master agreement with First American Real Estate Information Services, Inc., for IT and consulting services. First American provides real estate tax reporting, credit reporting, tax outsourcing and other services to mortgage lenders nationwide. EDS also signed a five-year agreement with ProCard, Inc., a developer of procurement card software, designating EDS as the global processor for ProCard's 1.5 million annual procurement transactions. ProCard software is currently used in more than 400 procurement programs, including those at First Chicago Corp. and NationsBank. EDS recently added procurement card processing services to its commercial card processing offering. Also in the second quarter, PhyCor, the nation's largest management service organization for medical clinics, selected EDS' InterPractice Systems (IPS) to transition its clinics to an automated environment. The IPS system, which is a comprehensive computer-based, patient-record system, records each medical encounter from the time the patient walks through the door to the time the visit is completed. Meanwhile, EDS' Communications Industry Group, through a wholly owned subsidiary, PremiTech Corporation, signed a 10-year agreement with Holmes Protection Group, Inc., a leader in providing security systems for the financial and jewelry districts in the Northeastern U.S. PREMITECH will provide IT services for Holmes, including maintaining the company's current systems, consolidating central stations and supporting telecommunications activities. In continued support of its parent, General Motors, EDS signed an agreement to provide the GM tax staff with international trade management services in support of the GM Customs Administration Group. EDS will support the efforts of the group in the areas of customs classifications, trade programs, duty drawback and valuation. This is a new line of business for EDS. EDS also reached a five-year agreement with the Buick Motor Division to provide technology, facility and operational business support services for the Buick Customer Assistance Center. EDS will be responsible for answering and responding to customer inquiries and concerns about Buick products while capturing the customer information in a database for future relationship-marketing initiatives. EDS also was awarded a contract to develop the next-generation Manufacturing Information System, which will be deployed at all Delco Electronics production sites. The system incorporates tools to monitor and report performance at all sites globally, which, in turn, allows best practices to be identified and communicated. Client/server technology will be utilized to distribute the processing load and provide hardware independence, as well as to provide a consistent user interface. Ten pilot sites have been selected at locations in Europe, the Pacific Rim and North America. Also in the second quarter, EDS opened what is believed to be the first commercial virtual reality center in the world. The center, which is located in Detroit, will be used to demonstrate, on a business-to-business basis, a variety of applications for rapidly evolving technologies that can simulate three-dimensional environments. And the French Organizing Committee for the 1998 World Cup soccer tournament announced it had chosen EDS as one of the two official IT suppliers for the 1998 games, which will be held in France. EDS served as the official IT partner for the 1994 World Cup, which was held in the U.S. ELECTRONIC DATA SYSTEMS CORPORATION Summary of Results of Operations (in millions, except per share amounts) Second Quarter Ended Six Months Ended June 30, June 30, 1995 1994 1995 1994 Revenues Systems and other contracts $ 2,950.1 $ 2,309.5 $5,726.4 $4,526.7 Interest and other income 12.0 24.5 20.7 46.6 Total Revenues 2,962.1 2,334.0 5,747.1 4,573.3 Total Costs and Expenses 2,607.6 2,025.8 5,085.1 3,996.8 Income Before Income Taxes 354.5 308.2 662.0 576.5 Provision for Income Taxes 127.6 110.9 238.3 207.5 Separate Consolidated Net Income $ 226.9 $ 197.3 $ 423.7 $ 369.0 Earnings Attributable to GM Class E Common Stock on a Per Share Basis $ 0.47 $ 0.41 $ 0.89 $ 0.77 Cash Dividends Per Share of GM Class E Common Stock $ 0.13 $ 0.12 $ 0.26 $ 0.24 Revenues related to GM and subsidiaries amounted to $982.5 and $856.2 million for the second quarter ended June 30, 1995 and 1994, respectively, and $1,880.5 and $1,697.9 million for the six months ended June 30, 1995 and 1994, respectively. Summary of Consolidated Balance Sheets (in millions) June 30, Dec. 31, ASSETS 1995 1994 Current Assets Cash and marketable securities $ 709.5 $ 757.8 Accounts receivable 2,473.6 2,147.5 Inventories 169.7 137.8 Prepaids and other 355.2 311.0 Total Current Assets 3,708.0 3,354.1 Property and Equipment, Net 3,043.3 2,756.6 Operating and Other Assets 2,909.7 2,675.8 Total Assets $9,661.0 $8,786.5 LIABILITIES AND STOCKHOLDER'S EQUITY Current Liabilities Accounts payable $ 553.5 $ 571.1 Accrued liabilities 1,338.0 1,451.0 Deferred revenue 617.4 536.7 Income taxes 119.7 111.0 Notes payable 283.1 203.4 Total Current Liabilities 2,911.7 2,873.2 Deferred Income Taxes 630.9 659.8 Notes Payable 1,528.3 1,021.0 Total Stockholder's Equity 4,590.1 4,232.5 Total Liabilities and Stockholder's Equity $9,661.0 $8,786.5 -0- 7/19/95 /CONTACT: Ken Smalling of EDS, 214-605-6792/ (GME) CO: Electronic Data Systems Corporation ST: Texas IN: CPR SU: ERN -0- (PRN) Jul/19/95 9:34 EOS (PRN) Jul/19/95 09:34 86 â -0- (PRN) Jul/19/95 9:49
EDS POSTS STRONG SECOND-QUARTER EARNINGS AND REVENUE GROWTH;
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