FRAMINGHAM (10/23/2003) - Electronic Data Systems Corp. (EDS) is delaying the release of its third-quarter earnings until Oct. 29 to give the company auditors additional time to review its new accounting policy, according to a company spokesman.
EDS had been scheduled to release its third-quarter results after the stock market closed yesterday.
Spokesman Kevin Lightfoot said the auditors needed more time to implement a new accounting policy under which EDS will change the way it reports revenue and costs on multiyear contracts. Previously, 35 percent of EDS's revenue was accounted for under the "percentage of completion" (POC) accounting method that allowed the company to report revenue for as-yet unbilled services, Lightfoot said.
After adopting the new rule, under which EDS will report revenue as it is billed and received, the company anticipates less than 5 percent of its revenue will be accounted for under the POC method, he said.
Despite the delay, EDS said it still expects to meet Wall Street analysts forecasts of US$0.32 per share, excluding one-time charges. EDS has said that adoption of the new accounting policy will reduce its earnings by approximately 65 percent to 75 percent in the second half of the year.
EDS said it planned to release data showing how its 2001 and 2002 earnings would have been reported under the new accounting method before it releases its third-quarter earnings. The company said it will also adjust its earnings for the first two quarters of 2003 to reflect the adoption of the new accounting policy.