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DIGITAL EQUIPMENT CORPORATION REPORTS FIRST QUARTER OPERATING RESULTS

DIGITAL EQUIPMENT CORPORATION REPORTS FIRST QUARTER OPERATING RESULTS
 MAYNARD, Mass., Oct. 14 /PRNewswire/ -- Digital Equipment Corporation (NYSE: DEC), the leading worldwide supplier of networked computer systems and services, today reported results for its first quarter, which ended Sept. 26, 1992.
 For the quarter, the company reported total operating revenues of $3,314,299,000, up 1 percent from the $3,293,085,000 of the comparable quarter a year ago. The loss for the quarter was $260,546,000 or $2.04 per share compared with earnings of $11,662,000 or 9 cents per share for the comparable quarter a year ago prior to a one-time charge related to a change in accounting for postretirement health benefits. The net loss for the comparable period a year ago, including a $485,495,000 one-time charge for the accounting change, was $473,833,000 or $3.80 per share.
 "Weakness in the world's major economies continues to present difficult challenges for our business and the information technology industry in general," noted John F. Smith, senior vice president of operations. "We experienced revenue growth in areas such as Systems Integration, workstations, personal computers and Digital's multivendor integration software, Network Applications Support.
 "Customer interest continues to grow in the next generation of computing, Digital's Alpha systems," he added. "Nearly 1,000 software vendors and original equipment manufacturers have publicly stated their intention to develop products based on the Alpha AXP architecture. Recognizing the importance of these vendors, we have shipped over 800 development systems and have opened 34 migration centers around the world. Just recently, Raytheon announced it is licensing the Alpha AXP architecture and will develop systems that meet military specifications. At the same time, customers are very enthusiastic about our 'Alpha- ready' program, which provides a clear, consistent, and economical migration path from the VAX systems they buy today to the Alpha AXP system they'll need in the future," Smith added.
 "We continue to eliminate costs in accordance with our recovery plan," said William M. Steul, vice president, finance. "R&D spending is down year-to-year and total population declined by 5,300 in the first quarter. We will continue our aggressive restructuring and cost reduction efforts."
 In commenting on the company's direction, President and CEO Robert B. Palmer said, "Digital will change. We are intent on ensuring that the customer is the focus of everything that we do. Moreover, our shareholders and customers want and expect us to be financially strong. Every activity that we undertake is guided by the goals of customer focus and a return to profitable growth.
 "While it will take time to bring about these changes, we have already begun the work," Palmer stated. "I am confident, given our large and loyal customer base, our leadership technology, and our skilled employees, that we can meet our goals."
 Digital Equipment Corporation, headquartered in Maynard, Mass., is the leading worldwide supplier of networked computer systems, software and services. Digital pioneered and leads the industry in interactive, distributed and multivendor computing. Digital and its partners deliver the power to use the best integrated solutions -- from desktop to data center -- in open information environments.
 ---
 NOTE TO EDITORS: Alpha AXP, AXP, and VAX are trademarks of Digital Equipment Corporation.
 DIGITAL EQUIPMENT CORPORATION
 Operating Results for the First Quarter Ending:
 9/26/92 9/28/91
 Product sales $1,767,821,000 $1,862,849,000
 Service & other revenues 1,546,478,000 1,430,236,000
 Total operating revenues 3,314,299,000 3,293,085,000
 Cost of product sales 1,019,957,000 910,148,000
 Service expense 1,017,650,000 893,204,000
 Total cost of sales 2,037,607,000 1,803,352,000
 Research & engineering 405,477,000 412,353,000
 Selling, general &
 administrative 1,131,187,000 1,057,706,000
 Net interest (income)/expense (9,426,000) (20,569,000)
 Income/(loss) before income taxes
 and cumulative effect of
 change in accounting principle (250,546,000) 40,243,000
 Income taxes 10,000,000 28,581,000
 Income/(loss) before cumulative
 effect of change in accounting
 principle (260,546,000) 11,662,000
 Cumulative effect of change in
 accounting principle, net of tax 0 485,495,000
 Net loss (260,546,000) (473,833,000)
 Average number of shares
 outstanding 128,001,937 124,836,380
 Income/(loss) per share before
 cumulative effect of change
 in accounting principle $(2.04) 9 cents
 (Loss) per share on cumulative
 effect of change in accounting
 principle 0 $(3.89)
 Net (loss) per share $(2.04) $(3.80)
 First Quarter Ending:
 9/26/92
 Product sales 1,767,821,000
 Service & other revenues 1,546,478,000
 Total operating revenues 3,314,299,000
 Cost of product sales 1,019,957,000
 Service expense 1,017,650,000
 Total cost of sales 2,037,607,000
 Gross Margin 61.5 pct
 Research & engineering 405,477,000
 Selling, general & admin. 1,131,187,000
 Operating (loss) (259,972,000)
 Operating Margin (7.8) pct
 Interest income (13,216,000)
 Interest expense 3,790,000
 (Loss) before income taxes (250,546,000)
 Pre-tax Margin (7.6) pct
 Taxes (total federal, state
 and foreign) 10,000,000
 Effective tax rate 4.0 pct
 Net (loss) (260,546,000)
 EPS $(2.04)
 Average shares outstanding 128,001,937
 Balance Sheet
 First Quarter Ending
 9/26/92
 Cash & cash equivalents 881,251,000
 Accounts receivable (net) 3,316,130,000
 (Re: A.R. days sales outstanding) 90 days
 Inventories:
 Raw materials 311,709,000
 Work in process 548,518,000
 Finished goods 917,096,000
 Total 1,777,323,000
 Prepaid expenses 357,801,000
 Deferred income tax charges, net 222,794,000
 Total current assets 6,555,299,000
 Net property, plant & equipment 3,417,544,000
 Other assets, net 766,831,000
 Total assets 10,739,674,000
 Bank loans and current
 portion of LTD 54,559,000
 Total current liabilities 4,790,494,000
 Deferred income tax credits net 23,033,000
 Long term debt 43,300,000
 Postretirement benefits 1,191,725,000
 Total liabilities 6,048,552,000
 Stockholders' equity 4,691,122,000
 Book value per share $36.59
 Capital spending (investment
 in PP&E) 131,919,000
 Depreciation & amortization 189,619,000
 Non U.S. revenues 2,066,709,000
 or 62 pct
 Total employee population approx. 108,500
 -0- 10/14/92
 /CONTACT: Bradley D. Allen, 508-493-7182, of Digital Equipment Corporation/
 (DEC) CO: Digital Equipment Corporation ST: Massachusetts IN: CPR SU: ERN


DH -- NE003 -- 9678 10/14/92 08:31 EDT
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Date:Oct 14, 1992
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