It seems like an inevitable trend – that is, large companies finding ways to cut costs by offloading non-core functions. And one of the leading outsourcers is EDS (NYSE: EDS).
However, the space is highly competitive – and unpredictable. For example, EDS had to deal with the termination of a major customer, Verizon (NYSE: VZ).
But, as seen with the latest Q1 report, EDS is getting traction. Profits came to $62 million, or 12 cents per share as revenues increased from $5.22 billion to $5.37 billion. There was also a 66% increase in signed contracts to $5.6 billion.
After all, EDS was able to snag mega contracts with Royal Dutch Shell and the Infocomm Development Authority of Singapore. In fact, there were 12 contracts in excess of $100 million.
EDS is also getting some growth with its integration services for SAP (NYSE: SAP) applications. Actually, the company is going to do the same with Oracle (NASDAQ: ORCL) software. Oh, and EDS is a key partner for Microsoft's (NASDAQ: MSFT) CRM offering.
Interestingly enough, the slowing US economy is actually helping. That is, companies – as well as governments -- need to find a way to cut costs. So, why not go offshore?
Tom Taulli is the author of various books, including The Complete M&A Handbook
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