Earnings per share were 69 cents, a 17% increase over 3Q, 2000 (59¢). Comparable net income grew by 20% to $334 million ($279m). Base (non-GM) organic revenue grew by 17%. Total revenue rose 16% to $5.6 billion.
On the impact of the September 11 tragedy, CEO Dick Brown noted EDS has experienced a significant increase in inquiries on disaster recovery, physical security and business continuity planning. The company expects some near-term pressure in travel and transportation but Brown is "confident EDS can absorb any weakness in a particular business segment without a negative impact to our overall results."
"We've embedded productivity into our culture and made it a competitive advantage for EDS," Brown said. "We're proud of what we've done, and we will continue to drive efficiency improvements throughout the company."
Third quarter milestones
• Eleventh consecutive quarterly record for contract signings.
• Tenth consecutive quarter of double-digit year-over-year EPS growth.
• Tenth consecutive quarter of year-over-year operating margin improvement. Operating margin was 11.2% for the quarter and is at 10.1% on a trailing four-quarter basis.
• Fourth consecutive quarter of base organic revenue growth above the market's rate of growth.
EDS again recorded double-digit base organic revenue growth across business segments and geographic regions. With a 21% revenue increase, Information Solutions, EDS' strategic infrastructure business, achieved its third consecutive quarter of 20% or better organic growth. Business Process Management base revenues were up 19% from a year ago.
E Solutions significantly exceeded the market rate of growth for the seventh consecutive quarter with a 45% revenue increase, enabling a 13% rise in EDS' consulting sector revenues.
Reflecting the overall softness in the management-consulting market, A.T. Kearney's revenues declined 8%.
Including the acquisition of Structural Dynamics Research Corporation in September, revenues for PLM Solutions, EDS' product lifecycle management business, grew 63% in the quarter. Organic revenues for PLM Solutions grew 15%, excluding the impact of the acquisition.
By geography, base organic revenues increased 23% in Europe, Middle East and Africa, 16% in the United States, 24% in Latin America and 12% in Asia Pacific.
The company's pipeline of business opportunities, including 88 contracts valued at more than $250 million, positions EDS for strong future growth. EDS' backlog of signed business remains strong and continues to grow.
The company is now running at a four-quarter trailing operating margin of 10.1%, advancing by a quarter its commitment to achieve double-digit operating margin performance. EDS' third-quarter operating margin was 11.2% versus 9.7% in the year-ago quarter.