Monday, 28 July 2008

EDS posts 'solid' Q2

The interesting thing about EDS' Q2 results was not what was contained in the headlines of the EDS press release or the many reviews of their results in the media. From those you would guess that a 22% rise in EPS and a 27% rise in contracts signed (at $5.4b) signalled a company in a high growth sector. Ron Rittenmeyer, EDS chairman, president and CEO described this as “a very solid performance". I suppose that is one way to describe the mere 3% revenue growth which reduces to a 2% decline if you strip out acquisitions and currency fluctuations. In EMEA, the growth was 3% - although I suspect that too would have been negative too if currency fluctuations were excluded.

Given the distractions of the impending HP takeover - which got EU approval today - actually standing still is probably quite an achievement. So I don't really complain about the 'solid' description.

I was discussing 'revised forecasts' with the EMEA head of one of the largest tech research companies last Friday. He told me they were about to issue revised 2008 and 2009 IT forecasts (for US and Europe) which would show no real growth in 2008 and a negative position in 2009. This pretty much accords with my view - except I started to say that back at the beginning of 2008. For my latest forecast for the UK SITS market, see chart above from my recent Breakfast Briefing for Grant Thornton which some HotViews readers attended. I know it sounds a bit silly, but I worry when other forecasters catch up with me. Always makes me feel that I am probably wrong! Maybe I'm now being too optimistic again?

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