EDS to miss financial targets

Troubled outsourcing giant EDS will miss its financial targets after restructuring debt associated with its $8.8bn US Navy...

Troubled outsourcing giant EDS will miss its financial targets after restructuring debt associated with its $8.8bn (£4.5bn) US Navy contract.

EDS will end the year with a negative cash flow of up to $322m after deciding to pay off early a $522m loan for equipment being used for an ongoing Navy Marine Corps intranet project.

The loan was due to run until April 2007 but the outsourcer decided an early repayment would enable it to make best use of its cash and assets. The Standard & Poor's credit agency last week removed EDS from its credit watch list.

The company, however, admitted that one of its staff was responsible for a systems failure that hit up to 40,000 PCs at the Department of Work & Pensions.

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