IT services provider Electronic Data Systems (EDS) reported a steep net loss for its first quarter of 2003, while revenue grew slightly.
EDS, the second-largest provider of IT services after IBM, posted a net loss of $126m (£79m) in the quarter ending 31 March. This compared with net income of $354m in 2002's first quarter. Total revenue rose 2% to $5.37bn (£3.4bn).
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The company's net profit was down by a $334m cumulative pre-tax loss associated with the mammoth, multiyear Navy Marine Corps Intranet (NMCI) project, which EDS won in October 2000.
The deal was expect to be worth $6.9bn (£4.3m) to EDS over the life of the contract, the company said at the time. Another dent in the profit line was a $48m pre-tax charge related to the severance package of former chief executive officer Dick Brown, who left on 20 March.
First-quarter net income was $144m (£90m). Contract signings amounted to $3bn (£1.9m), down from $7.2bn in 2002's first quarter.
EDS has been struggling for the past year and Brown's exit was seen as a necessary move to get the company back on track.
EDS' problems include lagging sales, a US Securities and Exchange Commission (SEC) investigation, layoffs, losses of high-profile deals and the bankruptcy of several big clients.