EDS to post 27% growth in 2003

The Brazilian operation of US outsourcing services provider Electronic Data Systems (NYSE: EDS) expects to post 27% year-on-year revenue growth in 2003, the company said in a statement, quoting chief executive Chu Tung. An EDS spokesperson could not confirm Brazilian revenues in 2002, but the company said Brazil accounts for 50% of EDS revenues in Latin America, which in turn contributes 3.5% of the company's worldwide revenue of US$21.5bn in 2002. For Brazil, that would add up to some US$376mn revenues in 2002. The bulk of EDS business in Brazil comes from the telecoms segment with 40% of total revenue, followed by the financial segment with 26%, and manufacturing and energy with 25% and 8%, respectively. Growth in 2003 has been fueled by improved efficiency following corporate restructuring, the signing of 35 new contracts, and improvements in call center services which included 1,000 new hires to focus specifically on telecoms and media customers, the statement said. By year-end the company expects to have more than 60 clients. Tung described 2003 as a "difficult" year, hindered by slow economic growth. The economy is starting to show green shoots but the private sector is unlikely to start investing again until early 2004, Tung said, adding that EDS expects to grow revenues by between 10% and 15% next year. EDS aims to consolidate its position as one of Brazil's top IT outsourcing providers, increasing market share in the telecoms, manufacturing, and card processing segments, he said. According to IT and telecoms consulting firm IDC, EDS ranks number two in the IT outsourcing segment in Brazil with 17.3% of the market, and ranks number one in Latin America. For IT services EDS is ranked number three in Brazil, with a 5.5% market share. By 2005, the company aims to become Brazil's largest processor of credit card transactions. Today, it already handles more than one billion credit card transactions and ranks third in Brazil, Tung said. EDS operates three software factories in Brazil, located in the cities of Sao Paulo, Florianopolis and Rio de Janeiro. The Rio factory is devoted to exportation.