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EDS meets forecasts

Electronic Data Systems met analyst estimates in the first quarter on slightly higher-than-expected revenue and told analysts to stick to their second-quarter earnings forecasts.

After market close Wednesday, the technology services provider reported first-quarter earnings of 19 cents per share on revenue of $4.99 billion. Analyst consensus predicted EDS (NYSE: EDS) would make a profit of 19 cents per share on revenue of $4.9 billion for the company's first quarter ended March 31, according to earnings tracking firm First Call.

During a conference call with analysts, EDS executives said they remain comfortable with First Call forecasts for per-share earnings of 62 cents in the second quarter and $2.64 for the full year.

CEO Dick Brown said he was "very, very confident" EDS could boost its second-quarter base revenue--which excludes business from General Motors (NYSE: GM)--13 to 16 percent year-over-year. That translates into second-quarter revenue of $4.3 billion to $4.4 billion.

Second-quarter revenue from GM will be about the same as a year ago, said Jim Daley, chief financial officer for EDS. GM generated $814.2 million in revenue for EDS in the second quarter of last year.

Should the company's forecast prove to be accurate, EDS would see second-quarter revenue of roughly $5.1 billion to $5.2 billion, or slightly more than First Call's consensus prediction of $5.03 billion.

"There is no slowdown in our business," Brown told analysts. "For us it is not a question of which way the economy is going. We're positioned to exploit spaces on the upside of the economic movement and the downside."

Non-GM revenue in the first quarter increased 13 percent year-over-year. The company's Information Solutions unit saw a 20 percent gain in revenue. Consulting revenue rose 11 percent.

The company's operating margin of 8.9 percent was down from 10.5 percent in the fourth quarter, although up from 8.2 percent in the first quarter of 2000.

Contract signings for EDS increased 67 percent to $7.5 billion in the March quarter.

EDS fell 28 cents to $63.27 in Wednesday's regular trading ahead of the first-quarter report.>