Digital Equipment Corp finally crawled back into profit in its fiscal fourth quarter, but the figure of $0.85 a share was a bit below analysts’ consensus estimates of $1.06 a share. The company said that as a result of the uncertain economic outlook, it remains very cautious about its ability to maintain profitability for the seasonally soft fiscal first quarter now under way. DEC also said its fourth quarter research spending fell 24% now that the hard work on the Alpha RISC is out of the way, the reduction of $116m a year earlier, to be more in line with competitive norms. The company says that in the quarter it experienced some slight revenue growth in the US and solid growth in Asia, compared with the fourth quarter of last year. However, our European business in general was weak, as was true for most technology companies, said William Steul, vice-president and chief financial officer. The rate of take-up of the Alpha AXP machines seems disconcertingly low, and revenues from the AXP line were a small factor in fiscal 1993 results, the company says, adding that it is looking forward to increasing contributions from this new line of computers. It says there are currently 2,600 software applications available to customers for the Alpha environment. Robert Palmer, president and chief executive, added that despite the company’s concern about the seasonally soft September quarter, he is confident that Digital is poised for resurgence. Analysts said that DEC’s revenues were somewhat better than expected, especially considering how other computer firms are faring in this difficult environment especially in Europe. Gross margins fell sequentially in the fourth quarter to about 38.7% of revenues, down from the third quarter margins of about 40.6%.
