Mr Jordan, and EDS CFO Bob Swan both gave in-depth presentations to Wall Street and highlighted the positives in the results that had been twice delayed due to a dispute with auditors over bonus payments and its contract with the US Navy.

Despite announcing a net loss of $153 million in the third quarter, Mr Jordan said that the company had stabilized during 2003, fixed its major problems this year, and was in a position to reignite new growth in 2005. He said: We are alive and kicking, and will be for a longer time than some of the others.

Investors responded positively to the results that also included a revenue decline of 1% to $4.95 billion. EDS’ shares traded at $22.88 on Tuesday, up 4% from their opening price of $21.95 at the start of the week, and have risen steadily since dipping below $16 in May.

The response can be attributed to the largely benign outcome of the audit firm KPMG’s investigation of EDS’ accounts. KPMG found that EDS committed no improper acts, although it said EDS incorrectly recognized $9 million in revenue from a client last year before it signed a settlement agreement with the customer. KPMG also recommended that EDS restate its bonus expenses from 2003, which EDS said would not alter overall numbers for the full-year period.

The contract with the US Navy has been a drain on EDS’ financial results for more than three years. EDS took a charge of $375 million in the third quarter to reduce the value of the deal, which was originally awarded in 2000.

The Navy deal could potentially bring in revenue of $8.8 billion to EDS over several years, but the vendor has so far lost well over $1 billion on the contract, including $422 million in the first nine months of 2004 due to the high cost of building the client’s new infrastructure.

Mr Swan said that there was a potential pipeline of new business with the Navy of $750 million at the end of September, including a major contract to build a VoIP network, which he expects to be awarded in the near future.

Business process outsourcing (BPO) was hailed as one area that EDS expects to drive further growth, particularly on contracts where it takes over the running of clients’ human resources and supply chain functions and underpinning IT systems.

However, EDS’ revenue from BPO fell 11% during the quarter to $693 million. BPO accounted for 11%, or $363 million of EDS’ new contract signings during the third quarter. Overall contract signings for the quarter were $3.3 billion, which was up only slightly on the $3.2 billion announced during the third quarter of 2003. Mr Jordan revealed the company would announce some major BPO initiatives in the next few weeks.

Another issue EDS has to address if it is to grow its revenue over the next few years is the replacement of its declining revenue from General Motors, its largest client and former parent company. Sales to GM fell 12% to $467 million in the third quarter, representing 9.4% of total sales. GM’s existing ten-year contract with EDS expires in June 2006, and the automaker is expected to work with a larger number of services suppliers in the future.

EDS reaffirmed that it is on target for full-year revenue of between $20 billion to $21 billion, which at best would mean a 2% decline from last year’s total.

Mr Jordan maintained that one of the company’s aims is to extend its position as the IT services sector’s second-ranked player behind IBM Global Services. But with CSC and Accenture gaining real momentum, EDS will have to work hard to put distance between itself and the rest of the competition.