EDS results take beating from Marine Corps

• Published: 16 Nov 2004 16:00

After multiple delays caused by it grappling with accounting issues, services provider EDS has finally reported a net loss of $153m (£82m) for the third quarter of this year.

The loss was affected by an asset impairment charge of $375m associated with the company's Navy Marine Corps intranet project. The contract was awarded in 2000 but has been plagued by delays and has drained cash from EDS.

The company also restated results for the third and fourth quarters of 2003. KPMG, its outside auditor, recommended the restatement to reflect a more appropriate allocation of money that EDS sets aside and accrues as an expense for subsequent employee bonuses.

EDS spokesman Terry Balluck said an 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.

The third-quarter 2004 loss compares with a restated net loss of $16m in last year's third quarter. Revenue in the third quarter of 2004 was $4.95bn, down 1% from a year earlier. EDS signed $3.3bn worth of contracts in the quarter, up 4% on last year's third quarter.

Stephen Lawson writes for IDG News Service