Fresh profits alarm at Electronic Data

ELECTRONIC Data Systems, America's second-largest computer services company after IBM, has issued another profits warning, saying it risks missing earnings targets this year due to problem contracts and diminished access to debt markets.

'There are more risks than opportunities,' the company's newly-appointed chief financial officer Bob Swan said in Dallas. EDS stunned Wall Street last year when it warned third-quarter profits would be 80% below expectations.

Yesterday, French engineering firm Alstom said it had scrapped talks to contract-out its technology operations to EDS because they could not agree terms.

EDS is trying to concentrate more on large companies and government contracts, such as its £2bn Whitehall deal, to protect earnings.

The company sought to offset the Alstom decision by announcing it had received clearance to expand work on a potentially lucrative contract with the US Navy.