EDS delays earnings, may take charge
Troubled Navy contract spurs delay, and possible earnings hit.
Technology services giant Electronic Data Systems on Monday delayed its earnings report while it considered taking another charge related to its troubled Navy contract. EDS, which was expected to discuss its third-quarter earnings Monday, said it would release financial results Nov. 3. The postponement "will enable the company and its auditors to complete the evaluation of a possible impairment of assets related to its Navy Marine Corps Intranet (NMCI) account," EDS said in a statement.
NMCI, a massive project to upgrade the U.S. Navy's computer and communication systems has been delayed for reasons that include "inefficient program management," according to EDS. Earlier this year, EDS wrote down $559 million related to the Navy deal. EDS' current evaluation "includes a review of projected cash flow over the expected lives of the assets used on the contract as compared to the net asset position of approximately $700 million on Sept. 30."