Dollars 183m loss at Digital shocks Wall Street

DIGITAL Equipment Corporation, the struggling New England computer-maker, reported losses for the last quarter four times worse than Wall Street expected yesterday, raising new doubts about its restructuring efforts.

DEC, once the world's second-largest computer firm after IBM, lost dollars 183m, or dollars 1.34 a share, during the first three months of the year; the year before, it lost dollars 30m, or 23 cents a share.

Sales fell 6 per cent to dollars 3.26bn, apparently because DEC was unable to keep up with customer demand for its Alpha AXP workstations, business PCs and some computer storage products.

In an unusual appeal in a quarterly earnings report, Robert Palmer - the executive who took over two years ago from Kenneth Olsen, the ousted company founder - urged senior managers to cut lead-times for high-demand products. At the same time, he said they also had to find ways to accelerate DEC's restructuring, cutting costs and conserving cash.

Mr Palmer called the results a surprise, and promised to have a new reorganisation plan ready by the end of June.

Wall Street had expected continuing losses while DEC turned itself around, but they far exceeded analysts' predictions. Trading in DEC shares was delayed for more than an hour as a result of the unexpectedly bad news, finally opening down dollars 4 1/4 at dollars 28 7/8 .