Conference 7.286::digital

958.0. "Q1 FY90 (1989/1990) Results" by CURIE::HAMMOND (Drew @MR4 - 297-3497) Thu Oct 19 1989 13:29

    The following was extracted from LIVEWIRE:
    
    
    LIVE WIRE
    
        Digital reports revenue gains for Q1
    
        Digital today reported higher sales for its first quarter, which
        ended September 30, 1989.
    
        For the quarter, the company reported total operating revenues of
        $3.1 billion, up six percent from the $2.9 billion from the 
        comparable quarter a year ago.  Net income for the quarter was 
        $150,783,000, compared with last year's first quarter net income 
        of $223,374,000.  Quarterly earnings per share were at the upper 
        end of investor expectations; $1.20 versus $1.71 last year.
    
        "Digital's overseas business improved in the quarter, compared 
        to that of a year ago, reflecting the strong investment 
        environment in Western Europe and Japan," noted Ken Olsen, 
        president. "Customer demand in the U.S. remains slow.  
        Moreover, the continued strength of the dollar depresses 
        overseas results when they are translated into U.S. currency."
    
        "On the product front, our workstation volume grew in excess 
        of 40 percent in terms of unit shipments and our personal 
        computer integration business grew 60 percent over last year.
        Our MicroVAX 3100 system, announced in July, has met with 
        exceptional customer demand," said Ken.
    
        Digital systems, services, and software are allowing 
        customers to become more efficient and more competitive 
        by tying their organizations together, and making teamwork 
        fluid and easy.  As an example, Digital was awarded a 
        computer contract worth a potential $97 million by the
        NASA Ames Research Center in California.
    
        Ken noted that "Digital is financially strong, and will 
        continue to invest to ensure our status as a premier computer 
        manufacturer and provider of customer solutions and services.  
        In the quarter just ended, combined spending for research and 
        development and investments in facilities and equipment 
        totalled $637 million."
    
        Investments in people and technology have continued to yield 
        positive results for Digital.  On Oct. 10, Digital announced 
        the first set of products that make ALL-IN-1 services available 
        to simple terminals, windowing terminals and IBM 3270 terminals; 
        Apple and MS-DOS PCs; and VMS and UNIX workstations.
    
        "Our strategy is focused on the integration of hardware and
        software offerings from various vendors through our unified 
        software environment called Network Application Support (NAS),"
        said Ken. "We have the best networking and integration 
        services and look forward to helping our customers meet the 
        challenge of the 1990's."
    ---
    IBM is a registered trademark of International Business Machines.
    MS-DOS is a registered trademark of Microsoft Corp.
    UNIX is a registered trademark of AT&T
    

re: .0

Does anybody ever look at COST TO SALES when they are reading a quaterly 
report?  To me this is THE indicator of the state of this company, how much it 
costs us to produce and sell.

--David 

	... to the cost of sales and services, that will give what I THINK is
called gross margin (?).  Whatever the name, it shows how efficient our sales
efforts are.

	For the few times I've looked at it, and not in the last couple of
quarters, it was in the 45-50% neighborhood.  That is, our revenue from sales
was about twice (50%) or a little less than twice the cost of sales/services. I
haven't seen the current statement, just read the press.

    COST of SALES is a very specific term as defined by the FASB (Financial
    Accounting Standards Board).  Specifically, it is the direct costs
    associated with *ITEMS* sold and the expenses of selling them.
    If it is HARDWARE, it will be the manufacturing costs allocated to
    it.  If it is software or services, it will be any direct cost and
    or manufacturing cost associated.  Salespersons and support staffs
    would be cost of sales.  
    
    The general rules of overhead also can be allocated to cost of sales
    if the overhead can be *directly* traced to the manufacture and
    delivery of product and services. 
    
    In summary, *we* can call anything we want in the company anything
    we want.  However, when we call a term a term for the financial
    statements *XYZ*.  It must conform to GAAP (Generally Accepted
    Accounting Principals) or we could be in a sticky wicket with the
    SEC. 
    
    
    :-) My God, I hadn't written anything that technical since I passed
    the CPA exam and then decided to become a *hacker*.

    		    Revenues - Cost of Goods Sold
    Gross Margin =  -----------------------------
    			 Revenues     
    
    Gross Margin is used as a profitability measure -- usually to judge the
    efficiency of a company's operations, since it does not take into
    account such factors as taxes or overhead.
    
    -Don-