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Note 922.0 Q4 '89 results 2 replies
ROM01::CIPOLLA "DEC's margin on an IBM sale is zer" 189 lines 27-JUL-1989 10:19
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FOR FURTHER INFORMATION:
MARK A. STEINKRAUSS
(508) 493 - 7182
BRADLEY D. ALLEN
(508) 493 - 8009
DIGITAL EQUIPMENT REPORTS REVENUE GAINS
FOR THE QUARTER AND YEAR
MAYNARD, MA - JULY 27, 1989
Digital Equipment Corporation (NYSE:DEC), the world's
leading supplier of network computer systems and services, today
reported higher sales for the fourth quarter of its fiscal year,
which ended July 1, 1989.
For the quarter, the Company reported total operating
revenues of $3,494,884,000, up 5 percent from the $3,339,439,000
of the comparable quarter a year ago. Net income for the quarter
was $313,215,000, compared with last year's fourth quarter net
income of $401,013,000. Quarterly earnings per share were $2.51
versus $3.08 last year.
For the full fiscal year just ended, the Company
reported total operating revenues of $12,741,956,000, up 11
percent from the $11,475,446,000 of a year ago; net income for
the year was $1,072,610,000, compared with $1,305,633,000 a year
ago. Earnings per share for the year were $8.45, compared with
$9.90 a year ago.
DIGITAL EQUIPMENT CORPORATION
REPORTS YEAR-END RESULTS
PAGE TWO OF FOUR
"Our overseas markets saw double-digit growth in the
quarter as a result of new hardware, software and service product
offerings, coupled with a strengthened sales and marketing
organization," said Kenneth H. Olsen, Digital President.
"Business conditions in the U.S. are still somewhat slow, with
fourth quarter revenues similar to those of the same period a
year ago, but up from the prior quarter. Both discretionary
spending and capital spending plans are being adjusted to reflect
current market conditions."
"We remain confident that we have the computing system
technology and business solutions that customers want," Olsen
added. "Nonetheless, with lackluster conditions in the U.S., and
the strengthened dollar depressing overseas results when
translated into U.S. currency, the Company remains cautious
entering the traditional low-volume September quarter."
The Company continues to make investments in R&D and in
new products and software, as well as in sales and marketing in
geographic areas of growth. Olsen noted, "Digital's strategy is
to focus on the computing environment of the 1990s by offering
the widest selection of customer solutions, based on hardware and
software from many suppliers. This is integrated through our
unified software environment, which is called Network Application
Support (NAS). With the positive reception of recently
introduced products, and increasing numbers of customers looking
to Digital for networking and integration services, the Company
remains confident in its outlook."
Digital Equipment Corporation, headquartered in Maynard,
Massachusetts, is the leading worldwide supplier of network
computer systems and services. Digital offers a full range of
computing solutions and systems integration for the entire
enterprise -- from the desktop to the data center.
****
DIGITAL EQUIPMENT CORPORATION
REPORTS YEAR-END RESULTS
PAGE THREE OF FOUR
FOURTH QUARTER ENDED:
JULY 1, 1989 JULY 2, 1988
PRODUCT SALES $2,255,064,000 $2,196,121,000
SERVICE & OTHER REVENUES 1,239,820,000 1,143,318,000
TOTAL OPERATING REVENUES 3,494,884,000 3,339,439,000
COST OF PRODUCT SALES 959,160,000 881,199,000
SERVICE EXPENSES 756,761,000 706,700,000
TOTAL COST OF SALES 1,715,921,000 1,587,899,000
RESEARCH & ENGINEERING 401,029,000 384,335,000
SELLING
GENERAL & ADMINISTRATIVE 998,285,000 860,041,000
NET INTEREST (INCOME)/EXPENSE (21,721,000) (27,520,000)
INCOME BEFORE INCOME TAXES 401,370,000 534,684,000
INCOME TAXES 88,155,000 133,671,000
NET INCOME 313,215,000 401,013,000
AVERAGE NUMBER OF SHARES
OUTSTANDING 124,640,947 130,260,782
NET INCOME PER SHARE $2.51 $3.08
OPERATING RESULTS FOR THE TWELVE MONTHS ENDED:
JULY 1, 1989 JULY 2, 1988
PRODUCT SALES $8,190,308,000 $7,541,241,000
SERVICE & OTHER REVENUES 4,551,648,000 3,934,205,000
TOTAL OPERATING REVENUES 12,741,956,000 11,475,446,000
COST OF PRODUCT SALES 3,468,307,000 3,042,172,000
SERVICE EXPENSES 2,773,563,000 2,426,176,000
TOTAL COST OF SALES 6,241,870,000 5,468,348,000
RESEARCH & ENGINEERING 1,525,129,000 1,306,543,000
SELLING
GENERAL & ADMINISTRATIVE 3,638,868,000 3,065,555,000
NET INTEREST (INCOME)/EXPENSE (84,586,000) (105,845,000)
INCOME BEFORE INCOME TAXES 1,420,675,000 1,740,845,000
INCOME TAXES 348,065,000 435,212,000
NET INCOME 1,072,610,000 1,305,633,000
AVERAGE NUMBER OF SHARES
OUTSTANDING 127,007,710 131,922,964
NET INCOME PER SHARE $8.45 $9.90
DIGITAL EQUIPMENT CORPORATION
REPORTS YEAR-END RESULTS
PAGE FOUR OF FOUR
Q4 - FY89
PRODUCT SALES ................................ $ 2,255,064,000
SERVICE AND OTHER REVENUES.................... 1,239,820,000
TOTAL OPERATING REVENUES ..................... 3,494,884,000
COST OF PRODUCT SALES......................... 959,160,000
SERVICE EXPENSE............................... 756,761,000
TOTAL COST OF SALES........................... 1,715,921,000
GROSS MARGIN 50.9%
RESEARCH & ENGINEERING........................ 401,029,000
SG&A (SELLING, GENERAL & ADMINISTRATIVE)...... 998,285,000
OPERATING INCOME.............................. 379,649,000
OPERATING MARGIN 10.9%
INTEREST INCOME............................... (31,790,000)
INTEREST EXPENSE.............................. 10,069,000
INCOME BEFORE INCOME TAXES.................... 401,370,000
PRE-TAX MARGIN 11.5%
TAXES (TOTAL FEDERAL, STATE & FOREIGN)........ 88,155,000
EFFECTIVE TAX RATE 22%
NET INCOME.................................... 313,215,000
EPS........................................... $2.51
AVERAGE SHARES OUTSTANDING.................... 124,640,947
BALANCE SHEET - Q4 FY89
CASH & TEMPORARY CASH INVESTMENTS............. $ 1,655,264,000
ACCOUNTS RECEIVABLE (NET)..................... 2,965,408,000
(RE: A.R. DAYS SALES OUTSTANDING)........... 76 DAYS
INVENTORIES: RAW MATERIALS...... 360,135,000
WORK IN PROCESS.... 570,064,000
FINISHED GOODS..... 707,802,000
TOTAL INVENTORIES......... 1,638,001,000
PREPAID EXPENSES.............................. 255,195,000
DEFERRED INCOME TAX CHARGES, NET.............. 381,140,000
TOTAL CURRENT ASSETS.......................... 6,895,008,000
NET PROPERTY, PLANT & EQUIPMENT............... 3,645,896,000
TOTAL ASSETS.................................. 10,667,779,000
SHORT TERM DEBT (CURRENT PORTION OF LTD)...... 29,755,000
TOTAL CURRENT LIABILITIES..................... 2,394,039,000
DEFERRED TAX CREDITS NET...................... 102,048,000
LONG TERM DEBT................................ 136,019,000
TOTAL LIABILITIES............................. 2,632,106,000
STOCKHOLDER'S EQUITY.......................... 8,035,673,000
BOOK VALUE PER SHARE.......................... 66.12
CAPITAL SPENDING (ADDITION TO PP&E) - QUARTER 318,379,000
CAPITAL SPENDING (ADDITION TO PP&E) - YEAR 1,223,038,000
DEPRECIATION - QUARTER........................ 192,104,000
DEPRECIATION - YEAR........................... 659,379,000
NON U.S. REVENUES - QUARTER................... 1,941,929,000
0R 55.6%
NON U.S. REVENUES - YEAR...................... 7,016,952,000
OR 55.1%
TOTAL EMPLOYEE POPULATION APPROXIMATELY....... 125,700
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