| Its down to 38 3/8, but the last I knew yesterday, it was at 41 7/8...
Maybe if BP was interviewed, he would have shed some light on why the 10% drop
over the past few days?
ts
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By Thomas E. Weber
Dow Jones Staff Reporter
NEW YORK -DJ- Any remaining hopes that Digital Equipment Corp. (DEC) might
avoid a loss this quarter have been quashed by a company presentation to
analysts this week.
Shares of the computer maker have tumbled following comments by company
officials yesterday. Digital's stock are down 1 7/8, or 4.7%, at 38 1/8 on
nearly 2.2 million shares. Yesterday the stock gave up 1 5/8, or 3.9%.
Although Digital didn't make any dramatic disclosures about the weakness of
current business conditions, it also had nothing upbeat to say.
Instead, Digital officials focused on introducing the company's management
team and reviewing its business strategy.
''The bottom-line conclusion that I drew is that, notwithstanding all of the
improvements that this company has made already... this is probably a long
process,'' says Laura Conigliaro, a Prudential Securities analyst who tracks
Digital.
Digital officials aren't available for comment.
Adams Harkness & Hill analyst John Adams says some Digital bulls might have
entered the presentation looking for a piece of positive news on the short
term. It didn't materialize.
''There certainly was a sense of anticipation about the meetings,'' Adams
says. ''It was their opportunity to say 'we're gaining market share here' or
'something's a little bit better than we thought.'''
Conigliaro says Digital's comments made it clear that a loss is in the cards
for the fiscal first quarter ending this month.
''If you want to train your sights on the short term, if there were any
hopes that the company could break even this quarter, throw that aside,''
Conigliaro says. She didn't alter her first-quarter estimate of a loss of 27
cents a share.
Market players say First Boston Corp. analyst Curt Rohrman widened his
first-quarter loss estimate following Digital's presentation. Rohrman isn't
available for comment.
In a recent survey of 13 analysts by Zacks Investment Research, the average
forecast for Digital's first quarter was a loss of 11 cents. Individual
estimates ranged from a profit of 43 cents to a loss of 35 cents.
Digital has generally been perceived as turning its business around,
although most observers think plenty of work remains to be done.
Last month the company reported fiscal fourth-quarter earnings of 85 cents -
Digital's first profit in nearly two years.
For the first quarter ended Sept. 26, 1992, Digital lost $2.04 a share, or
$260.5 million, on $3.31 billion in revenues.
Robert Herwick, a technology analyst at Hambrecht & Quist, says investors
must use a longer time frame to understand the Digital story.
''Wall Street, unfortunately, tends to be very short-term oriented,''
Herwick says. ''The real time horizon here is calendar 1994.''
Herwick also suggests that the weakness in Digital's shares following its
presentation this week could present a buying opportunity to long-term
investors. ''I certainly considered Digital under $40 a share as a great
turnaround value,'' he says.
(END) DOW JONES NEWS 09-15-93
2:42 PM
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