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of Electronic Data Systems 1999 Business Results
A Real 4Q Slam-Dunk!
EDS Forsakes Stock Buybacks after Spending $1.8B in 1999 on Them
PHOENIX, Feb. 4 When IBM reported its 1999 business results a couple of weeks ago, we called the smoke and mirrors performance by its CFO A Slam-Dunk of Bunk! Thats because the Big Blue couldnt even touch the rim in the fourth quarter, let alone slam the ball down the hoop. And every NBA basketball coach, player or a fan knows that real winners make their slam-dunks in the fourth quarter, when the chips are down.
Well, let us present to you a real fourth quarter slam-dunk contest winner: EDS. This IT services company was supposed to be on the ropes in 1998, amid executive turmoil and underwhelming sales.
Forget that. That was last season. Thats ancient history. EDS outsold and out-dunked the Big Blue in the fourth quarter of 1999 for the first time in recent history. Final score: EDS $11.2 billion; IBM $10.3 billion. In new contract sales, of course.
Neither figure is too shabby a performance. For IBM, thats also its record quarter. Except that even the Big Blues best still wasnt good enough to beat a resurgent EDS.
In IBMs case it meant surrendering at least for one quarter the lead the worlds No. 1 IT services vendor had held for most of the 1990s. And which had enabled IBM to overtake EDS as the worlds largest IT services company five years ago (see the chart on the front page). Guess it aint over till its over, to paraphrase the proverbial English language expert, Yogi Berra.
But EDS will have to execute a few more slam-dunks before its 1999 comeback can be taken as a tell-tale sign that a former IT services champion is trying to reclaim its crown in the future. Because for all of 1999, IBM Global Services (IGS) did outsell EDS by a wide margin ($38.8 billion vs. $24.9 billion in new contract sales).
Nevertheless, both companies exited the 20th century with backlogs of just over $60 billion, up about 20% in each case over the year before (1998).
Segment Analysis - by Geographies, Industries
Why Smaller Is Better
Happy bargain hunting!
NOTE: The print edition of this report, of course, contains additional charts and tables not included here.
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Editor: Bob Djurdjevic
5110 North 40th Street, Phoenix, Arizona
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