EDS shares jumped over 25% on Monday, May 12, 2008, after it was revealed that the company was in talks to be acquired by Hewlett-Packard. HP confirmed the $13.9 billion offer, or $25 per share, after the market close on Monday. The companies expect to close the deal in the second half of this year. HP hopes that the EDS acquisition will strengthen its services business.
The price of EDS shares fell when the company announced contracts dropped to $4.3 billion from $5.4 billion in the second quarter, a decrease of 20.4%. Although the company also announced quarterly increase in sales and earnings, the drop in contracts was significant enough to push down the share price about 10%.
EDS's stock price dropped $2, 6.8%, when the company reported lower-than-expected sales for the first quarter 2007. The price movement came despite the fact that EDS posted strong profits for the quarter.
EDS posted its fourth quarter earnings for 2006, which saw a year-over-year doubling in profit. Earnings exceeded the average analyst estimate by 11 cents a share, or nearly 30%. This strong performance boosted the stock price by 3.3% in one day, and led the way for a very bullish February for EDS.
