Shares of Electronic Data Systems Corp. fell $4.375 Friday, to $38.625, after the company reported less than stellar earnings for the first quarter.

The Plano, Tex.-based outsourcer showed net income of $211 million, up 8.8% from a year earlier, on revenues of $3.9 billion, up 14.5%. Though revenue growth was the fastest since the third quarter of 1996, the "quality of the earnings was lousy," said Karl Keirstead, analyst at Lehman Brothers. EDS sold about $40 million of assets to "juice up" earnings, he said.

EDS missed Wall Street's earnings estimate of 44 cents per share by a penny; it was the fourth such miss in seven quarters.

One-time gains accounted for about 5 cents per share, Mr. Kierstead estimated. Without those gains, EDS' earnings would have remained flat.

The company's earnings woes were precipitated by a 2.3% decline in revenues from contracts with General Motors Corp., whose business represents about 25% of EDS revenues.

On a more positive note, EDS' business apart from GM did better than had been expected, with revenues growing about 19%.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.