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DIGITAL EQUIPMENT CORPORATION REPORTS IMPROVED SECOND QUARTER OPERATING RESULTS AND SIX PERCENT REVENUE GROWTH

 MAYNARD, Mass., Jan. 14 /PRNewswire/ -- Digital Equipment Corporation (NYSE:DEC), the leading worldwide supplier of networked computer systems and services, today reported results for its second quarter, which ended Dec. 26, 1992.
 For the quarter, the Company reported total operating revenues of $3,689,443,000, up 6 percent from the $3,479,489,000 of the comparable quarter a year ago. The Company reported a net loss for the quarter of $73,859,000, compared with a net loss of $155,236,000 of the comparable quarter a year ago. Per share results for the quarter were a loss of $.57 versus a loss of $1.25 for the second quarter of fiscal 1992.
 For the six months ended Dec. 26, 1992, the Company reported total operating revenues of $7,003,742,000, up 3 percent from the $6,772,574,000 of the comparable period a year ago. Net loss for the first six months of fiscal 1993 was $334,405,000, versus a loss for the similar period a year ago of $629,069,000, which includes a $485,495,000 charge for a change in accounting principles related to post retirement health benefits. Per share results were a loss of $2.60 versus a loss of $5.05 for the first six months of fiscal 1992.
 "We are encouraged with our progress toward the transformation of Digital," said Robert B. Palmer, Digital's president and chief executive officer. "While we still have much to do and are not satisfied with any loss, we continue to work diligently toward our goal of becoming a growing and profitable company again, which our customers, partners, shareholders, and employees expect."
 "Customers are enthusiastic about our new Alpha AXP products, and we are encouraged by the positive response among software and hardware developers who have selected Alpha AXP as their 64-bit RISC architecture. There are currently more than 1,000 software developers who are porting more than 2,000 applications to Alpha AXP. The simple migration path that the Company provides to the next generation Alpha AXP systems appears to have improved sales of existing Alpha-ready VAX products as well."
 "This past quarter we also announced the restructuring of the company's operations into nine customer-focused business units. Five of the nine are defined by natural customer groupings of industries while the other four are defined by the nature of their products and services. These business units are chartered to drive revenue growth and profitability in specific markets where our strengths and opportunities are greatest," Palmer added. "Beginning in Fiscal Year 1994, these business units will have all of Digital's worldwide profit responsibility."
 William M. Steul, vice president and chief financial officer said, "While we were encouraged by our improvement in overall operating results compared with last year, results from some countries outside the U.S. remained soft. Given the economic uncertainties worldwide, our outlook remains cautious."
 "Our cost reduction efforts are continuing to produce results," Steul added. "R&D spending declined by $19 million and SG&A spending was essentially flat compared with the second quarter of last year. Our balance sheet remains strong as asset management continues to improve in several areas. Total population declined by almost 6,500 in the quarter to 102,100," he added.
 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 business 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 REPORTS SECOND QUARTER OPERATING RESULTS
 THREE MONTHS ENDED
 DECEMBER 26, 1992 DECEMBER 28, 1991
 PRODUCT SALES $1,967,234,000 $1,939,387,000
 SERVICE & OTHER REVENUES 1,722,209,000 1,540,102,000
 TOTAL OPERATING REVENUES 3,689,443,000 3,479,489,000
 COST OF PRODUCT SALES 1,116,538,000 1,095,121,000
 SERVICE EXPENSE 1,058,270,000 943,810,000
 TOTAL COST OF SALES 2,174,808,000 2,038,931,000
 RESEARCH & ENGINEERING 404,843,000 423,603,000
 SELLING, GENERAL &
 ADMINISTRATIVE 1,177,306,000 1,181,379,000
 INTEREST INCOME,
 NET OF EXPENSE 1,655,000 11,761,000
 (LOSS) BEFORE INCOME TAXES (65,859,000) (152,663,000)
 PROVISION FOR INCOME TAXES 8,000,000 2,573,000
 NET (LOSS) $(73,859,000) $(155,236,000)
 WEIGHTED AVERAGE SHARES
 OUTSTANDING 129,154,484 124,257,437
 NET (LOSS) PER SHARE $ (.57) $ (1.25)
 SIX MONTHS ENDED
 DECEMBER 26, 1992 DECEMBER 28, 1991
 PRODUCT SALES $3,735,055,000 $3,802,236,000
 SERVICE & OTHER REVENUES 3,268,687,000 2,970,338,000
 TOTAL OPERATING REVENUES 7,003,742,000 6,772,574,000
 COST OF PRODUCT SALES 2,136,495,000 2,005,269,000
 SERVICE EXPENSE 2,075,920,000 1,837,014,000
 TOTAL COST OF SALES 4,212,415,000 3,842,283,000
 RESEARCH & ENGINEERING 810,320,000 835,956,000
 SELLING, GENERAL &
 ADMINISTRATIVE 2,308,493,000 2,239,085,000
 INTEREST INCOME, NET OF EXPENSE 11,081,000 32,330,000
 (LOSS) BEFORE INCOME TAXES &
 CUMULATIVE EFFECT OF CHANGE IN
 ACCOUNTING PRINCIPLE (316,405,000) (112,420,000)
 PROVISION FOR INCOME TAXES 18,000,000 31,154,000
 (LOSS) BEFORE CUMULATIVE EFFECT
 OF CHANGE IN ACCOUNTING
 PRINCIPLE (334,405,000) (143,574,000)
 CUMULATIVE EFFECT OF CHANGE IN
 ACCOUNTING PRINCIPLE,NET OF TAX --- 485,495,000
 NET (LOSS) $(334,405,000) (629,069,000)
 WEIGHTED AVERAGE SHARES
 OUTSTANDING 128,578,210 124,546,908
 (LOSS) PER SHARE BEFORE
 CUMULATIVE EFFECT OF CHANGE
 IN ACCOUNTING PRINCIPLE $ (2.60) $(1.15)
 (LOSS) PER SHARE ON CUMULATIVE
 EFFECT OF CHANGE IN ACCOUNTING
 PRINCIPLE --- (3.90)
 NET (LOSS) PER SHARE $ (2.60) $(5.05)


DIGITAL EQUIPMENT CORPORATION REPORTS SECOND QUARTER OPERATING RESULTS
 Q2 - FY 93
 PRODUCT SALES ........................... DLRS 1,967,234,000
 SERVICE AND OTHER REVENUES............... 1,722,209,000
 TOTAL OPERATING REVENUES................. 3,689,443,000
 COST OF PRODUCT SALES.................... 1,116,538,000
 SERVICE EXPENSE.......................... 1,058,270,000
 TOTAL COST OF SALES...................... 2,174,808,000
 GROSS MARGIN 41.1 %
 RESEARCH & ENGINEERING................... DLRS 404,843,000
 SELLING, GENERAL & ADMINISTRATIVE........ 1,177,306,000
 OPERATING (LOSS)......................... (67,514,000)
 OPERATING MARGIN (1.8)%
 INTEREST INCOME.......................... DLRS 14,209,000
 INTEREST EXPENSE......................... 12,554,000
 (LOSS) BEFORE INCOME TAXES............... (65,859,000)
 PRE-TAX MARGIN (1.8)%
 INCOME TAXES (TOTAL FEDERAL, STATE & FOREIGN) 8,000,000
 EFFECTIVE TAX RATE 12.2%
 NET (LOSS)............................... DLRS (73,859,000)
 (LOSS) PER SHARE......................... (.57)
 WEIGHTED AVERAGE SHARES OUTSTANDING...... 129,154,484
 BALANCE SHEET - Q2 FY93
 CASH & CASH EQUIVALENTS.................. DLRS 1,365,340,000
 ACCOUNTS RECEIVABLE, NET................. 3,132,020,000
 A.R. DAYS SALES OUTSTANDING 76 DA


YS
 INVENTORIES: RAW MATERIALS......... 336,150,000
 WORK IN PROCESS....... 601,119,000
 FINISHED GOODS........ 894,961,000
 TOTAL............. DLRS 1,832,230,000
 PREPAID EXPENSES......................... 385,945,000
 DEFERRED INCOME TAX CHARGES, NET......... 222,794,000
 TOTAL CURRENT ASSETS..................... 6,938,329,000
 NET PROPERTY, PLANT & EQUIPMENT.......... 3,342,265,000
 OTHER ASSETS NET......................... 745,162,000
 TOTAL ASSETS............................. 11,025,756,000
 BANK LOANS & CURRENT PORTION OF LTD...... 44,181,000
 TOTAL CURRENT LIABILITIES................ 4,284,492,000
 DEFERRED TAX CREDITS, NET................ 23,033,000
 LONG-TERM DEBT........................... 779,785,000
 POSTRETIREMENT BENEFITS.................. 1,208,682,000
 TOTAL LIABILITIES........................ 6,295,992,000
 STOCKHOLDERS' EQUITY..................... 4,729,764,000
 BOOK VALUE PER SHARE..................... 35.96
 CAPITAL SPENDING (INVESTMENT IN PP&E)- Q2 124,544,000
 DEPRECIATION & AMORTIZATION......... - Q2 224,544,000
 CAPITAL SPENDING (INVESTMENT IN PP&E)-YTD 256,463,000
 DEPRECIATION & AMORTIZATION......... -YTD 414,163,000
 NON U.S. REVENUES - QTR.................. 2,406,977,000
 or 65%
 NON U.S. REVENUES - YTD.................. 4,473,686,000
 or 64%
 TOTAL EMPLOYEE POPULATION, APPROXIMATELY. 102,100
 -0- 1/14/93
 /CONTACT: Bradley D. Allen, 508-493-7182 or James Chiafery, 508-493-8009, both of Digital Equipment Corporation/
 (DEC)


CO: Digital Equipment Corporation ST: Massachusetts IN: CPR SU: ERN

CH -- NE003 -- 4704 01/14/93 08:36 EST
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