EDS Seeking Buyer for Subscription Fulfillment UnitElectronic Data Systems is trying to sell its subscription fulfillment operation, the company said Friday, one day after its stock dropped more than 50 percent in value.
A spokesman confirmed that the sale was related to the company's financial trouble, but he said the fulfillment center would remain active until a buyer was found.
"We are looking for a buyer but we have no plans to just shut it down or cease operation," said spokesman Doug DeLay. "We are committed to a smooth transition when we get a buyer."
Late Wednesday, the Plano, Texas-based company said it expects third-quarter revenue to be down 2 percent to 5 percent, rather than up as EDS executives had previously forecast, and earnings of 12 to 15 cents a share, well below previous estimates of 74 cents.
Some of EDS' troubles can be traced to company specific issues, including that US Airways and WorldCom, two large customers, both have filed for Chapter 11 bankruptcy protection. But EDS executives attributed much of the problem to what they said was a halt in spending by large corporations.
"We expected spending to tighten ... not virtually stop," EDS chairman/CEO Dick Brown said during a conference call last week.
EDS purchased the Louisville, CO, fulfillment operation from Neodata in 1997 for $300 million and later combined it with several other companies it had acquired into its Centrobe division.