Digital Equipment is looking to tap into new growth; analysts see turnaround, but finding revenue could be a challenge
Article Abstract:
DEC posted its first profit since 1991 in 4th qtr FY 1993, largely as a result of an aggressive cost-cutting effort that included a 20 percent workforce reduction and replacing much of senior management. The major challenge will be to increase revenue in new markets faster while revenues from the firm's long-time stalwart, proprietary minicomputers, continue their precipitous slide. Many analysts believe a turnaround of the nation's second biggest computer firm under the leadership of CEO Robert Palmer is likely. DEC hopes that a sales force working with new incentives, the marketing of computer services, the powerful new Alpha microprocessor and continued strong demand for the firm's high-capacity disk drives will all help boost revenue and profit in the long run. New sales and marketing director Edward S. Lucente has reorganized the sales force to serve vertical markets and began offering incentives for the first time in the company's history.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1993
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At Digital Equipment, slowdown reflects industry's big changes; belt-tightening and the use of outside technology strain corporate culture; is new mainframe a cure-all?
Article Abstract:
DEC, once the second largest computer manufacturer in the world, is reducing costs and moving personnel around in the face of fierce competition and changing fortunes in the computer industry. DEC's situation is typical for computer manufacturers in 1989: the company's 4th qtr earnings will probably be its weakest since 1985. DEC's 32-year tradition of no layoffs is threatened as 700 employees are asked to retire early and others in manufacturing are offered jobs in sales. DEC has already stopped hiring and frozen pay raises. DEC's entrenchments seem to be working: in FY ended Jul 1, 1989, earnings topped $1 billion, and sales grew 11 percent to $12.74 billion. DEC also is expanding its product line with the introduction of workstations and mainframes to supplement its sales of minicomputers and challenge IBM.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1989
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Digital Equipment posts quarterly loss, sees continued slump, more cost cuts
Article Abstract:
Digital Equipment Corp (DEC) reports a loss of $138.3 million for the 2nd qtr of FY 1992, ended Dec 28, 1991. Gross profit margins are reported at a record low of 43.7 percent. These results are worse than forecasters expected, and representatives of DEC are not optimistic about the immediate future. DEC's shares fall $4.25 on Thursday, Jan 16, 1992, closing at $54.75. According to DEC Senior VP John F. Smith, there is no reason to expect an immediate improvement in the world's slowed economic conditions. Therefore DEC foresees more cost cutting and more downsizing. DEC plans to eliminate 9,000 to 10,000 jobs in the fiscal year ending on Jun 30.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1992
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