PALO ALTO

Hewlett-Packard has agreed to buy Electronic Data Systems (EDS) for about $13.2bn (£6.60bn) cash in a move that would double its services revenue.

In a separate announcement, the computer maker and technology services provider yesterday announced that its fiscal second-quarter earnings exceeded expectations and raised its full-year financial targets.

The EDS announcement prompted HP to report select financial data for the latest quarter ahead of its previously scheduled release.

The California-based company said per-share income in the quarter ended April 30 rose to 80 cents from 65 cents a year ago. Excluding amortisation costs, profit rose to 87 cents per share from 70 cents per share. That result exceeded the 84 cents per share expected by analysts.

HP did not give net income or sales figures. The company expects to report full second-quarter results on May 20.

The company now expects earnings in the year ending October 31 to be between $3.30 and $3.34 per share, up from the prior estimate of $3.26 to $3.30 per share and raised its forecast for adjusted earnings to $3.54 to $3.58 per share from the previous $3.50 to $3.54 per share.

The company also boosted its sales forecast, to $114.2bn to $114.4bn. It had expected $113.5bn to $114bn.

HP said the financial targets issued yesterday do not include any effects from the EDS acquisition. - AP