Saturday, November 03, 2007

BUSINESS DIGEST

Technology services

Electronic Data Systems profit

climbs 80% in third quarter

PLANO — Technology services company Electronic Data Systems Corp. said Friday that earnings surged 80 percent in the third quarter, and contract signings were the best in five years.

Shares of EDS rose 50 cents, or 2.4 percent, to $21.72 in after-hours trading.

EDS said net income climbed to $225 million, or 42 cents per share in the quarter ended Sept. 30. That was up from $125 million, or 24 cents per share, a year earlier. Analysts expected profit of 41 cents per share, according to Thomson Financial.

Revenue rose just over 6 percent, to $5.63 billion, but fell short of analysts' forecast of $5.65 billion.

EDS has been trying to reduce its reliance on traditional aspects of information-technology outsourcing that are maturing. Instead, it has focused on faster-growing fields, such as application services — helping companies run end-user software such as database programs and spreadsheets.

Petroleum

Chevron's high refining costs drive down earnings 26%

SAN RAMON, Calif. — Chevron Corp.'s third-quarter profit plunged even further than analysts feared, driven by the second-largest U.S. oil company's inability to recover its higher refining costs at the gasoline pump.

The San Ramon-based company said Friday that it earned $3.72 billion, or $1.75 per share, for the three months ended in September. That represented a 26 percent decline from net income of $5.02 billion, or $2.29 per share, at the same time last year.

Analysts were bracing for a lower profit, but the erosion was worse than their average earnings estimate of $2.07 per share, based on a poll by Thomson Financial.

Revenue growth also was lackluster during the quarter, edged up just 2 percent to $55.2 billion.

Chevron Chairman David O'Reilly blamed the earnings letdown mostly on gas prices that lagged the company's higher costs for crude oil — the main ingredient in petroleum.

Medical technology

Medtronic pays $4.2 billion

for spinal device maker Kyphon

MINNEAPOLIS — Medical device maker Medtronic Inc. said Friday it has completed its $4.2 billion buyout of Sunnyvale, Calif.-based Kyphon Inc.

The deal, initially announced by Medtronic in July, was seen as a move by the device maker to jump-start its spinal business. Kyphon designs medical devices to treat and restore the spine in the U.S. and Europe.

Medtronic is best known for its implantable pacemakers and defibrillators, spinal implants and insulin pumps.

Directors of both companies have unanimously cleared the deal, and Kyphon shareholders signed off on it two weeks ago.

Kyphon shareholders will receive $71 per share in cash for each share of Kyphon common stock. Medtronic put the total value of the deal, including payment of Kyphon debt, at $4.2 billion.

Medtronic said it financed the deal primarily with cash on hand.

Compiled from wire reports