MCN Direct Newswire

Vol. 2 No. 4, 27 January 2003

This issue is sponsored by:

BT and IBM

This issue news

1. EDS faces formal SEC inquiry
2. SchlumbergerSema profit hit by charges
3. Unisys back in the black
4. Accenture works for women
5. Outcomz acquires Criticall
6. Further information - feedback/forward to a colleague/unsubscribe

Sponsor

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1. EDS FACES FORMAL SEC INQUIRY

EDS is facing a formal investigation by the US Securities and Exchange Commission (SEC) relating to a profit warning last year that shocked the market and caused a 34% decline in the company's share price (MCN Direct 49, 50).

The probe, which follows an initial informal enquiry launched in September, centres on events leading up to the warning, and a further financial fumble concerning EDS' use of hedging activities that pushed its share price down an additional 29%.

EDS responded to news of the formal enquiry by saying it would "continue to co-operate fully with the SEC in this matter".

Since the financial problems, EDS chairman and CEO Dick Brown has sought to calm investor fears, announcing 5,000 job cuts and the intention to sell non-strategic assets (MCN Direct 55).

But EDS has suffered more knocks in the loss of potential major contracts with Procter & Gamble and JP Morgan Chase. It has also cut its fourth-quarter and full-year earnings estimates by 10% to cover a $40 million write-down on aircraft leases with United Airlines, which has filed for Chapter 11 bankruptcy (MCN Direct 61).

2. SCHLUMBERGERSEMA PROFIT HIT BY CHARGES

SchlumbergerSema finished fiscal 2002 with its turnover up 32% at $3 billion and a pre-tax profit before charges of $34 million.

The profit reversed a loss of $33 million in 2001 - but was decimated by charges of $3.2 billion relating mainly to the loss of 1,600 jobs following a decision to focus SchlumbergerSema's work mainly in the energy sector (MCN Direct 61).

The company's fourth-quarter turnover rose 7% on last year's comparable period to $813 million, with pre-tax operating profit up 35% at $33 million before a $16 million charge to cover severance costs.

Schlumberger chairman and CEO Euan Baird said: "SchlumbergerSema continues to make progress in defining its strategy as part of Schlumberger, in reducing costs and improving margins."

Schlumberger as a whole reported 2002 turnover of $13.5 billion - down from $14 billion in 2001 - and operating profit before charges down 36% at $692 million.

* Separately, SchlumbergerSema has secured a $24.3 million, three-year contract with the UK Department for Transport to lead a consortium that will provide the Transport Direct portal. The portal will provide information on all forms of transport and be available to travellers using the internet by the end of this year.

Sponsor

IBM

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3. UNISYS BACK IN THE BLACK

Unisys has recovered from a $67.1 million net loss in 2001 to report net profit of $223 million last year. But its turnover for the year dropped 7% to $5.61 billion. The 2001 loss was exacerbated by charges of $293.5 million, but excluding these Unisys still performed well in 2002 with net profit up 44%.

In the fourth quarter last year, the company's net profit reached $89.1 million, reversing a net loss of $169.4 million in Q4 2001. Turnover was flat at $1.55 billion.

Fourth-quarter turnover in Unisys' services business rose 4%, with outsourcing and systems integration showing double-digit growth that was partially offset by declines in its project-based infrastructure services and maintenance business. Operating margins on services were also up, from 3% in Q4 2001 to 7.1%.

Unisys chairman and CEO Larry Weinbach commented: "We started 2002 with a clear overall objective - to significantly improve our profit margins and earnings per share. We achieved this objective by being highly focused and disciplined in the types of business opportunities we pursue in the marketplace. We won nearly $80 million of long-term outsourcing and managed infrastructure services contracts in the fourth quarter." Unisys closed 2002 with a services backlog of $6 billion, up 5% on a backlog of $5.7 billion at year-end 2001.

4. ACCENTURE WORKS FOR WOMEN

Accenture has won the prestigious Catalyst award for its efforts in supporting women's career development.

Catalyst, a US-based non-profit research and advisory organisation working to advance women in business, gave Accenture its 2003 award citing the global nature of Accenture's "Great Place to Work for Women" programme.

Initially implemented in the US in 1994, Great Place to Work for Women has since been expanded globally and is customised locally to offer information, networking opportunities, policies and support programmes.

Despite Accenture's proactive approach to women's development, the company remains male dominated. Female partners - essentially senior-level executives - accounted for 10% of all partners in 2002, up from 5.8% in 1994. Also in 2002, women comprised 14.1% of all promotions to partner globally and 19% of all promotions to partner in the US.

Accenture chairman and CEO Joe Forehand said: "Empowerment without opportunity is useless. At Accenture we've focused on fostering a more inclusive work environment."

Accenture's Great Place to Work for Women programme is sponsored by Forehand and managed globally by Gill Rider, chief leadership officer and a member of the company's management committee.

5. OUTCOMZ ACQUIRES CRITICALL

Business transformation consultancy Outcomz has acquired Criticall, a provider of event notification systems for business continuity and crisis management.

The seven-figure takeover is described by Outcomz as a 'Bimbo' (buy in management buy out) move that will see the consultancy add to Criticall's management team, change its board structure and provide capital to support Criticall's growth plan.

Criticall founder Marcus Vaigncourt-Strallen explained: "We have considered several funding options over the past year, but were impressed by Outcomz' overall strategy and plans."

As well as Bimbo activity, Outcomz - which was set up in July 2001 and operates as a virtual consultancy with around 30 associates - offers payment-by-results business consultancy, seed funding for new-start fast-growth businesses, and joint venture opportunities for small companies seeking to optimise their businesses.

With three joint ventures expected to be completed next month, Outcomz claims it is on target to achieve profits of $2 million on turnover of $10 million in 2003.

Criticall numbers most of the FT100 companies on its client list. Its multi-channel notification and response solutions are used for applications such as alerting technical staff to computer and network problems, and the company claims it is well positioned to meet increasing demand for business continuity and emergency planning systems from companies and governments.

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