Digital reports first net loss in its history; computer maker's deficit tied to severance costs; 4th-period revenue fell
Article Abstract:
DEC's financial report for the 4th qtr of 1990 attributed its first net losses in 32 years of operation to a 3.7 percent revenue decline and a $400 million charge for work force reductions. Investors' belief in DEC's additional expense cutting through elimination of another 5,000 to 6,000 jobs meant the company's stock declined only 62.5 cents. The net loss per share for the 4th qtr was $2.11. The net income would have been only $.68 per share, much less than the $1.00 predicted by industry analysts, even without the severance program costs. The annual net income per share for FY 1990 was $.59 per share, compared to $8.45 per share in FY 1989. Effects of these losses include Moody's Investors Service Inc's reduction of DEC's debt rating from triple A to double A2, some stockbrokers not recommending DEC stock as an investment and reduced dividend predictions for FY 1991.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1990
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DEC net falls 28%, but stock advances $6.625
Article Abstract:
DEC announces better-than-expected 2nd qtr 1991 results that include a 28 percent drop in net income compared with the same period a year ago. The relatively small decline in income surprised Wall Street analysts, and DEC's stock soared $6.625 to close the day at $59.375. Results for the quarter include net income of $111.1 million on revenue of $3.35 billion, compared with year-ago income of $155.4 million on revenue of $3.18 billion. Analysts say the results are quite encouraging and reflect the success of DEC's cost cutting strategies that include 3,500 layoffs to be implemented in the coming months. Analysts also point to DEC's success at increasing revenues from its services sector.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1991
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Digital Equipment stock drop isn't over, analysts say, despite strong fundamentals
Article Abstract:
DEC stock dropped $2.875 a share to $56.375 a share on Sep 14, 1990 and analysts suspect that the world's second largest computer maker's stock has not hit rock bottom. The stock is the lowest since 1985 and some analysts are forecasting that the company will incur its second quarterly loss in the 1st fiscal qtr ending Sep 30, 1990. DEC's outlook is not promising in light of a deteriorating economy that is hurting sales worldwide. DEC is beginning to slowly pare down its large work-force in order to cut costs. DEC began its first voluntary severance program when it employed 125,800 people; officials are predicting that employment will be down to 119,000 by Jun 1991.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1990
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