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

To: kodiak_bull who wrote (1828)	12/11/2002 11:03:02 AM
From: Larry S.	Respond to of 1841

EDS running - due to this article? EDS Chairman Brown Sees Bright Outlook for IT Services Tuesday December 10, 4:39 pm ET By Bob Sechler PLANO, Texas -- Electronic Data Systems Corp. (NYSE:EDS - News) Chairman and Chief Executive Dick Brown asserted his company remains "rock solid," although he didn't comment specifically on the recent profit warnings and missteps that have rattled investor confidence in it. Mr. Brown, speaking during EDS' meeting for industry analysts, maintained the computer-services company remains extremely well-positioned heading into 2003. He called the information-technology services sector "very, very anemic" overall, but said it inevitably will rebound. "Times are tough, no question," added Mr. Brown. "But we see enormous potential for the future" in IT services as corporations and government increasingly consider outsourcing their computer operations. The analyst gathering came on the heels of EDS' latest profit warning Monday, when it announced the bankruptcy of UAL Corp. (NYSE:UAL - News) will shave its fourth- quarter earnings by five cents a share. EDS will take a charge to write down the value of some investments in aircraft leases with UAL. Prior to Monday's warning, EDS had previously reduced its fourth-quarter earnings outlook to a range of 51 cents to 56 cents a share. Several analysts at Tuesday's meeting said they were surprised EDS executives didn't discuss that issue or others that have raised concerns about the company in recent months, resulting in a severe downturn for the stock. Mr. Brown didn't take questions during the formal presentations and wasn't available for media questions afterward. EDS shares have fallen about 75% year to date, with much of the plunge coming in one fell swoop following a surprise third-quarter profit warning in September. The company has previously blamed its troubles on the slowdown in the IT-services industry, as well as the bankruptcy of major customers such as US Airways Group Inc. (UAWGQ) and WorldCom Inc. (WCOEQ). "So far, you could say that the last 12 months haven't happened," Gartner analyst Ian Marriott said during a break halfway through Tuesday's event. He noted he had been hoping in particular that EDS executives would comment on market rumors the company may be an acquisition target in light of its sharply reduced market value. EDS has previously denied the rumor. EDS spokesman Jeff Baum reiterated that position later Tuesday in an interview with Dow Jones Newswires, flatly stating that EDS is "not for sale." Mr. Baum also pointed out that Tuesday's event was intended for industry analysts, not financial analysts, so EDS was intentionally steering clear of financial performance and similar issues. "We're focusing on what we do" for customers, he added. "The focus [of Tuesday's event] is on our value proposition." EDS executives spent much of their presentations outlining the structure of the company's internal operations and describing particular strengths in pursuing and serving a variety of customers. Among other things, EDS unveiled a new internal organization, called Client Solutions, Global Sales and Marketing. The new group is designed to pull together and streamline all of the company's myriad offerings, presenting "one EDS internally, and one EDS externally to our clients," said Chuck Griffith, a new executive president who is leading the division. Executives also said the company's A.T. Kearney consulting group will work closer with its main business lines. The consulting services can help clients reap quicker savings from computer outsourcing services, they said. Overall, Mr. Brown touted EDS' business plan and prospects as extremely strong. He said more companies and governments than ever before are considering outsourcing computer operations, although the economic slowdown has delayed some decisions. "We're moving past the noise and focusing on clients," added Mr. Brown. "The fundamentals of good, sound business have never changed. They never go out of fashion." Several of the industry analysts in attendance said the event was valuable in terms of hearing about EDS' unique positioning and services offerings for 2003. Still, some would have liked to hear more about the company's recent difficulties and specific strategies to get past them. "That's a question I would have liked to ask," IDC analyst Richard Dean said, referring to EDS' airline exposure in light of its recent UAL warning. -By Bob Sechler, Dow Jones Newswires; 512-236-9637 Dow Jones Newswires 12-10-02 1639ET