Conference 7.286::digital

    
    They plan to make a profit by balancing the equation: 
    
       Profit = revenue - expense
    
        ! Where you either reduce expense.  That's us...
        ! or.. 
        ! You increase Revenues (That's much harder than expense cuts)
    

    .2
    Strongly suggest that we need to increase revenue and reduce expense
    (vs either).
    We have reduced costs by some 45K employees while holding revenues
    flat only to discover that the net impact was a fiscal $500m operating
    loss. 
    Picture a presentation to the Board back in FY 87. Stock at $200,
    the company generationing a profit and a plan to reduce costs by
    some 45K employees while holding revenue flat. Just imagine the
    the profit project/speculation that would sizzle around the room.
    Now,time travel to 94 and look at the realities of the computer
    industry margins. Surprised ?
    One again,picture the same presentation to the Board in 1994 with
    a plan to reduce costs by some 20K employees. Just imagine the
    speculation regarding P & L. Now time travel ahead X years.
    I believe we are positioned for recovery. More focus on the revenue
    side would feel much better. Seems we still spend a great deal
    of DVN communication time addressing DEC of the 80's and the mess
    in Digital today. The 80's was a DECADE ago,this is the mid 90's !
    When the conversation is DIGITAL TODAY and TOMORROW vs DEC yesterday
    and today;bet the ranch on $200 stock!
                                          

    Perhaps they are all to busy promoting each other and holding internal
    reorganization meetings. I'm hopeful that sometime around the end of
    May, 1995, that we will finally have the organizational strucuture in
    place and can begin work on a plan for FY94. Of course that may be
    optimistic. (Oh, my! Did a negative thought slip out there? Please
    ignore the man behind the curtain. The great and powerful OZ is in
    complete control and will have your company reorganized at any moment
    now. Just click your heels together and repeat - I wish  I wasn't the
    only one left. I wish I wasn't the only one left... and poof - you'll
    disappear too! Watch what you wish for...it just may come true!)
    
    ;^)      OFWAMI
    

Re .2:
    
>    They plan to make a profit by balancing the equation: 
    
>       Profit = revenue - expense
    
>        ! Where you either reduce expense.  That's us...
>        ! or.. 
>        ! You increase Revenues (That's much harder than expense cuts)
    

That does seem to be how Digital management is going about increasing profits.
The problem is that revenue and expense are not independent; they are each
functions of a lot of variables (some in common between the two).

I'm afraid that the way management is going about it, the revenue curve will
finally meet the expense curve at zero.

Yes, expenses have to be cut. But they have to be cut in the way that minimizes
the effect on revenue. To do that, you need to know where your revenue is really
coming from.

     I predict a small profit. How can we miss with that ~$400,000,000
     sale to Quantum (which seemed to be timed for the Q1 close) ?? If
     we still show a loss, something is really bad.

          Mike

The sale to Quantum will be an extraordinary item.  Investors will be looking
for operating profits.

    The completion of the sale to Quantum was announced to have been 
    completed Oct. 3, which is Q2.  Anybody know if the 'revenue' will be 
    counted as part of Q1, or Q2.
    
    Mark
    

if it happened in q2 it will be counted in q2.
it will not count as revenue. it will not affect profit.
it is strictly a balance sheet transaction.

    
    I think we all have a clue - we'll lose millions of $$.

    
    Damiani said recently that we lose M$3.0 a day. How many days had Q1 ?
    Maybe we lose less on Sundays ?
    

    
    If we make a profit. Then they should bring back........
    
    the holiday turkeys.
    
    

Our group just got a bunch of office supplies, today, that had been on order
for some time. I hope we're not buying post-its on credit.

>Per

    
    From reliable source, we actually make money on Sundays, the only
    ( to my admittedly limited knowledge) subsidiary that works on Sunday,
    Israel , is profitable.

    re: .13 
    
    NOOOOOOO!!!! Not another Turkey note!!!    ;-)
    

    re. 16
    
    you bet...can't afford that...then give us..chickens.
    

    Re: .4
    
    on organization changes:
    
    "We trained hard -- but it seemed that every time we were beginning to
    form into teams, we would be reorganized.  I was to learn later in life
    that we tend to meet any new situation by reorganizing.  And what a
    wonderful method it can be for creating the illusion of progress while
    producing confusion, inefficiency and demoralization."
    
    
    Gaius Petronius Arbiter - First Century A.D.>

    
    When are the results announced
    
    Martin.

    >When are the results announced
    
    Typically, 7 to 10 business days after a quater's end
    
    

    >When are the results announced
    
Oct 19th...

    
    $131 million loss or $.98 cents a share. Last year's first quarter loss
    was $154 million. We reduced headcount by 4,000 from last quarter.
    Sales were up 4% to $3.122 billion from $3.015 billion. Now to see how
    Wall Street reacts to these numbers, bet that they won't be surprised
    at all. Stock will probably go up, just a matter of how much.
    
    Mark