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Technology Stocks : EDS - Recent pullback a buy opportunity??? -- Ignore unavailable to you. Want to Upgrade?

To: james-rockford who wrote (1755)	9/20/2002 9:56:45 PM
From: james-rockford	Respond to of 1841

From a EDS internal e-mail; From: Brown, Dick Sent: Wednesday, September 18, 2002 4:09 PM Subject: Dick Brown Message Importance:High To the EDS Worldwide Team: In a few moments, we will announce disappointing news. I wanted you to hear it from me first directly and candidly. We will tell security analysts and the world press EDS expects operating results for the third quarter will be lower than our previous estimates to Wall Street. Earnings per share for the quarter is expected to be in the range of 12 cents to 15 cents compared to previous guidance of 74 cents. Total revenue for the quarter is expected to be approximately $5.3 billion to $5.5 billion down 2 to 5 percent from the $5.6 billion we reported a year ago. We had expected a 4 to 6 percent increase in total revenue. While contract signings are improving, we anticipate market softness will continue well into next year. The economic downturn which many economists expected to be short-lived has had a severe impact on our industry. It is impacting us severely as well. We therefore revised our fourth quarter and full-year financial estimates. Once it became clear we would fall short of our financial commitments, we did not hesitate to act. We could not wait until our scheduled 30 October earnings announcement to alert Wall Street. We stepped up to tell shareholders the disappointing news. The bulk of our shortfall is driven by the downturn in the economy. Client and prospective client budgets remain tight. Sales cycles have lengthened. Contracts are taking longer to close. US Airways and WorldCom have filed for bankruptcy protection. Market conditions nobody foresaw have slowed the pack. We retain our leadership position, but the performance of our entire industry is stressed. However, a portion of the shortfall was within our control. Pursuit costs climbed as signings were delayed. Financial performance deteriorated on a number of contracts, primarily in Europe. These issues are being addressed. We must learn from today's disappointment and emerge a better company. EDS remains a strong, profitable enterprise with a firm financial foundation. This announcement has no impact on the day-to-day operational side of our business on the service we provide to clients. It does not affect our ability to win new contracts. In the past three years, we have created enormous potential for EDS. We transformed our structure and synchronized our lines of business with market opportunities. We relentlessly pursued productivity improvement to enhance our competitiveness. We built up our pipeline of potential business. Your skills, capabilities and experience are now the finest in our industry. EDS today is a fundamentally better company than it was a year ago and will be better still a year from now. We know what we need to do. We will emerge from this economic down cycle and from its impact stronger than at any time in our 40-year history. I want to take this opportunity to express my sincere thanks to every member of our great team for your continued engagement, your continued passion. The economy has disappointed us our challenges still lie ahead. Yet as a team, we will prevail and win, with Action, urgency, excellence! Dick Brown