EDS Slashes Profit Outlook for Quarter

Electronic Data Systems Corp. said third-quarter profit will be a fifth of what it had forecast as corporations slash spending on computer-services contracts. The announcement sent EDS shares down 34% in extended trading and pulled down shares of its rivals.

EDS, the world’s No. 2 seller of computer services, said sales will be $5.3 billion to $5.5 billion, down as much as 5% from a year ago, and profit will come in at 12 cents to 14 cents a share, rather than the 74 cents it had expected.

Fourth-quarter sales and earnings also will miss estimates, the company said.

EDS closed down $1.30 at $36.46 on the New York Stock Exchange before the announcement and fell to $24 after hours.