Conference 7.286::digital

    Well somebody must know something, because the stock has dropped from
    49 1/8 down to 44 3/8 in just a couple of days. That represents about
    a 10% loss. Hopefully the trend will stabilize soon. It can't be the
    overall market: it's been going up ...
    
    Geoff

This down-trend is not Digital specific - other computer stocks plunged as well.
After all, there might have been many investors who just waited for the stock to
climb to a certain value and then sell (after holding them for a long time...).

Hans.

    Every quarter, the discussion is the same:
    
    - How Q? doing?
    - It must be doing bad the stock is going down!  
         OR
      It must be doing good the stock is going up!
    - No, its the industry in general, etc.
    - Its buy on the rumor, sell on the fact.
    - Etc.
    
    Can't we just refer people back to the notes for a previous quarter
    and save the discussion?
    
    				-John

    I agree - this is getting monotonous.  Anyone who REALLY knew how the
    company was doing wouldn't be allowed to say so.
    
    Should I write-lock this note?
    
    			Steve

    re.3
    
    A M E N

    every quarter we point them at NYOSS1::DIGITAL_INVESTING and tell them
    to have a good discussion over there.
    
    Mark

|    Should I write-lock this note?

I don't think so. Those who are bored can just hit next unseen. 

>Per

>     <<< Note 3908.4 by QUARK::LIONEL "Free advice is worth every cent" >>>
>
>    I agree - this is getting monotonous.  Anyone who REALLY knew how the
>    company was doing wouldn't be allowed to say so.
>    
>    Should I write-lock this note?
>    
>    			Steve
    
    Great criteria for write-locking, Steve.  You might add misspellings,
    poor formatting, and notes without the word DIGITAL in them at least
    twice...  Guess I'll have to check the policies note on this conference
    for "no boring notes" rules.
    
    These strings usually begin to digress and cover:
    
    	1 - company profitability
    	2 - accounting procedures
    	3 - stocks in general
    	4 - performance of our competitors
    	5 - our changing product line
    
    from which I, personally, tend to learn a lot.  As a previous noter
    said "hit next unseen" if you're bored.  Please let the individual
    noters determine for themselves what deserves that treatment.
    
    								Tex

    In last Saturday's Barrons I noticed that Digital was listed under
    revised earnings down.  The consensus was .26 and is now .21

    
    Yea, Tex - way to go pardner...
    
    Personally I've decided that our stock price and quarterly sales focus
    are strictly related to sun spots and the relative position of Jupiter
    during the third phase of the Earth's moon prior to the closest
    Thursday before the end of a Digital Fiscal Quarter. If everything is
    in harmony, the stock climbs. If the phases are out-of-synch, the
    stock drops. What the NYSE is doing as a whole is completely 
    irrelevant; what our sales force is doing is immaterial; and what
    the boys in Maynard are doing doesn't count.
    
    It's in the stars.....
    
    
    		the Greyhawk

RE: .10

	Thanks Grayhawk.  Now I know what I've
been doing wrong... I was using the relative position 
of Mars during the second phase of the moon....

Dave V

[From "News of the Weird"]

* In January, British astronomer Dr. Jacqueline Mitton told
reporters that all star signs are about one month off, meaning that
everyone who believes in astrology has been reading the wrong
signs.  The dates for each star were drawn up more than 2,000
years ago, said Mitton, but "[t]he Zodiac is constantly changing,"
for example now spending only seven days under Scorpio and
more than a month each under Virgo, Taurus, and Pisces.
Countered astrologer Jonathan Cainer of London's Daily Mail
newspaper:  "Her claim is codswallop." [St. Louis Post-Dispatch-
Reuters, 1-21-95]

RE: Stock Price.  Don't forget this is employeee stock purchase (Really dump)
time.  I would expect the price do go down from all the selling for the quick
profits.

re: .12

not to mention precession of the equinoxes and the 13th sign

;-)
paul

    re .13
    
>     <<< Note 3908.13 by NYAAPS::CORBISHLEY "David Corbishley 323-4376" >>>
>
>RE: Stock Price.  Don't forget this is employeee stock purchase (Really dump)
>time.  I would expect the price do go down from all the selling for the quick
>profits.
    
    Yes, but ... today's the day the the EPP sales take place (those
    that get pre-scheduled in VTX IS), and DEC stock went UP today.

    
    Which proves my point about the proper alignment of the moon, Jupiter,
    and our sun.
    
    		the Greyhawk

    
    
    
    
      So hows Q4 doing?

    Fine thanks.

    
    Got Married I heard......

    at the risk of being serious...I hear good things from the field people
    I talk to.  I bet a reasonable Q4 based on that (I'm not selling my
    stock).
    
    ken b.

    Yes the farmers also are telling me this,is good yes?

    farmers always low-ball.  If crop yields are great, they complain about
    prices.  When prices go up, it's usually because of floods or
    something...  :-)
    
    Mark

    Has anobody seen the FMV (Fair Market Value) for our regular stock on
    June 1? That's the beginning of the new ESPP period. Have not seen
    anything on VTX VNS, VTX LiveWIRE or VTX Stock.
    
    Thanks,
    Henny

    If you sold your stock on June 1, you should get $45.51.
    
    The buying price for the end of the period was $27.75.
    

    reply -1:
    
    So the FMV for June 1 is 45.51, that implies that if the stock-price
    is below that value on November 30, we will by stock this current
    period for 85% of that value, so 31,25 (rounded up).
    
    Thanks,
    Henny

.25>    If you sold your stock on June 1, you should get $45.51.

.26>    So the FMV for June 1 is 45.51

The statement I got recently from Investor Services had a column labelled "Sale
Price" and a column labelled "FMV".  I pre-sold for June 1 and got $45.51
("Sale Price"), but the the FMV was distinctly NOT $45.51.  They are calculated
differently; FMV is the average of the high and low on the previous date, and
Sale Price is the average price of all shares sold by the IS broker.

    .-1 is correct - the sale price and FMV are not equal (but usually
    rather close).
    

    Henny, I am tired (it is midnight over here) but something about your
    calculation seems a little strange.  :-)
    
    If the value of the stock on 30th November is over $45.51, then we will
    buy at 85% of $45.51 ($38.75, rounded up to nearest 0.25) and sell at a
    higher price.  If the closing price (30th November) is lower than
    $45.51, then we will buy at 85% of that lower price, and sell at the
    full 30th November price.
    
    That is all assuming that the $45.51 is the opening price on 1st June!!
    I have not checked that one...................  Oh, and of course not
    taking into account the commission.......and....
    
    Good night
    Shalom
    Baruch
    
    ps  what is this all to do with Q4?  and why is everyone so worried
    about the gains/losses on the share program?  if we all do our job
    surely the stock will take of itself and we will all do OK..... or am
    I just too tired and..............  Oh well back down the rabbit
    hole...  now where is Alice.......  yawn,yawn............
    
    
                                                             

For June 1, 1995 the High was 46 1/8, the low was 45 1/8.  Take the average of
these two (45 5/8) *.85 = $38.78, rounded to the nearest $.25 is $39.00.  This
is how the ESPP purchase price is calculated.  It is not related to the sale
price of stock for that day (Your FMV), which must be in that range.  The only
way it would be the same number would be by luck, or if the price stayed the
same the whole day.  :-)

Elaine

         <<< HUMANE::DISK$CONFERENCES:[NOTES$LIBRARY]DIGITAL.NOTE;1 >>>
                        -< The Digital way of working >-
================================================================================
Note 3908.30                         Hows Q4                            30 of 30
CADSYS::RITCHIE "Elaine Kokernak Ritchie, 225-4199"   8 lines  22-JUN-1995 14:19
--------------------------------------------------------------------------------
For June 1, 1995 the High was 46 1/8, the low was 45 1/8.  Take the average of
these two (45 5/8) *.85 = $38.78, rounded to the nearest $.25 is $39.00.  

>>>	Wouldn't the nearest $.25 be $38.75?  Or is the policy "rounded up to the 
>>>									^^
>>>	nearest $.25"?


This is how the ESPP purchase price is calculated.  It is not related to the sale
price of stock for that day (Your FMV), which must be in that range.  The only
way it would be the same number would be by luck, or if the price stayed the
same the whole day.  :-)

Elaine

The purchase price FMV isn't rounded - it was 39.504 for this last period.

				Steve

    re: .31
    
    Yes, the ESPP buy price is rounded up to the nearest 1/4.  Purchase
    price FMV isn't rounded, but I don't think that's what .31 was asking
    about.
    
    	Steve

    DOES ANYONE KNOW IF DIGITALS WORLDWIDE SALES ARE ON COURSE FOR Q4.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

    I see Bob Palmer still has a credibility problem. 
    
    Al
    

>    DOES ANYONE KNOW IF DIGITALS WORLDWIDE SALES ARE ON COURSE FOR Q4.
    
    NO.  WE WON'T FIND OUT UNTIL QUARTER CLOSE PROBABLY.  CAN YOU HEAR ME
    OK?

I moved the preceding three replies from a separate topic.

			Steve

    .34 _IS_ BOB PALMER (RUSSELL GALLEY IS JUST A PSEUDONYM)

    From this week's "The European", business section (I don't have a
    scanner, and I'm too lazy to type this all in - just an ecxerpt):
    
    "Revitalised Digital on line for a return to profitability"
    Author: Claudia Flisi
    
    If all goes well through to the end of this month, Digital Equipment
    Corporation will end its financial year in the black. After four years
    of losses, Digital's second and third quarters have shown operating
    profits, and a knowledgeable source predicts that "the fourth quarter
    will be at least as good as the third".
    
    Should the trend continue, the Massachusetts computer company will have
    had a turnaround just as dramatic as that of IBM, once its closes
    competitor.
    
    ...etc...

            Digital today reported net income of $160 million, or $1.01 per 
       common share, for the fourth quarter which ended July 1, 1995, compared
       with a net loss of $160 million, or $1.22 per common share, for the 
       same period last year, excluding restructuring charges and other 
       non-recurring items.
    

          Digital reports fourth quarter net income of $160 million
   
         Digital today reported net income of $160 million, or $1.01 per 
   common share, for the fourth quarter which ended July 1, 1995, compared 
   with a net loss of $160 million, or $1.22 per common share, for the 
   same period last year, excluding restructuring charges and other 
   non-recurring items.
         Total operating revenues for the quarter were $3.75 billion, 
   compared to the $3.92 billion reported for the comparable quarter a 
   year ago.  Adjusted for divestments, revenue from ongoing businesses 
   grew 1 percent compared with the same period last year.  The quarterly 
   result reflected a shift in seasonality patterns as the company 
   successfully moved a larger portion of its product distribution to 
   indirect channel partners and changed its direct sales force 
   measurements.  For the year, operating revenue was $13.81 billion, up 3 
   percent from the $13.45 billion reported in the 1994 fiscal year, or 6 
   percent, adjusted for divested businesses.
         Gross margin for the quarter was 32.4 percent, compared with 29.9 
   percent for the comparable period in the prior year and 32.2 percent in 
   the third quarter. 
         Total operating expenses for the quarter decreased to $1.043 
   billion from $1.321 billion, or 21 percent, compared with the same 
   period last year.  
         The balance sheet continued to strengthen as Digital ended the 
   quarter with $1.6 billion in cash, an increase of $421 million, or 36 
   percent, compared with last year.
         The corporation ended the quarter with approximately 61,700 
   employees -- a reduction of 16,000 positions, or 21 percent, since the 
   same period last year. 
         "For the first time in five fiscal years, Digital has reported 
   net income for the year.  In addition, this is the fourth consecutive 
   quarter of operating results improvement and the third consecutive 
   quarter we've reported a profit," said President, Chairman and Chief 
   Executive Officer Robert B. Palmer.  "We are particularly pleased with 
   the turnaround we have engineered within our core systems products 
   business.  Digital's recovery continues to progress on our aggressive 
   plan.
         "We are transitioning from a period of financial turnaround and 
   recovery into a strategic growth phase," Palmer added.  "I am 
   encouraged with our fourth quarter results and the significant progress 
   we've made in a relatively short time.  However, we still have more 
   work to do."
         Product revenues were down 4 percent in the quarter to $2.132 
   billion from $2.225 billion in the fourth quarter of the previous year. 
   Adjusted for divestments, product revenue from ongoing businesses was 
   up 5 percent and represents the fifth consecutive quarter of 
   year-over-year product revenue growth on this basis.  Service revenues 
   were $1.618 billion, compared with the $1.698 billion reported in the 
   same period last year.
         Palmer said the company recorded strong performance in its Alpha 
   systems and its Multivendor Customer Services businesses.  Alpha 
   product revenues grew by 32 percent over the prior year, driven by 
   strong market demand for AlphaServer systems running Digital UNIX, 
   OpenVMS and Windows NT operating systems.  The company also recorded 
   strong results in its network and storage subsystems product 
   businesses.
         In April, Digital unveiled the computer industry's most powerful 
   server systems aimed at both technical and scientific applications and 
   enterprise-wide database applications.  The new "Turbolaser" 
   AlphaServer 8400 enterprise server and AlphaServer 8200 departmental 
   server using Digital's industry leading 64-bit technology enables 
   businesses to run some database applications on Digital UNIX up to 200 
   times faster than on current 32-bit systems offered by competitors.
         "Market acceptance of our 'Turbolaser' products is very 
   encouraging," Palmer said.  "In the few months these models have been 
   available, we have experienced strong order demand.  Our midrange 2100 
   Alpha departmental servers also continue to be in high demand."
         Earlier this month, the company unveiled a complete new line of 
   workstations that spans the entire $5,000 to $50,000 spectrum of the 
   core workstation market.  The line includes models that offer 50 
   percent to 150 percent higher application performance than competing 
   models, along with new 3-D graphic options and multimedia enhancements. 
   The top-of-the-line AlphaStation 600 models are powered by Digital's 
   Alpha 21164 RISC microprocessor, the industry's first to process more 
   than one billion instructions per second.
         "Clearly, the AlphaStation 600 puts Digital far ahead of its 
   major competitors in terms of both absolute performance and price 
   performance," Palmer continued.  "Combined with our AlphaServer 
   systems, we now have a full-range of superior technical and commercial 
   computing solutions for all aspects of the market."
         After 12 quarters of explosive market share gains, revenue growth 
   in the personal computer business moderated in the fourth quarter.
         "With our Digital PC business at an annual run rate of $2.5 
   billion, we expect both continued progress and to capture additional 
   market share in the 1996 fiscal year," Palmer said. "During the quarter 
   we took steps that were necessary to position Digital's PC business 
   infrastructure for its next growth phase, which requires a balance of 
   profit improvement, cash utilization and market share gain."
         Adjusting for divested businesses, Digital achieved very strong 
   product revenue growth in Asia/Pacific markets and modest growth in 
   Europe.  On a year-over-year basis, product revenue declined slightly 
   in the United States.
         Product gross margin was 31.2 percent, compared with 28.7 percent 
   in the third quarter of fiscal 1995 and 25.2 percent in the fourth 
   quarter of fiscal 1994.  Improvement was driven by continued cost 
   controls, stable pricing practices and a favorable mix shift towards 
   AlphaServer products.  Service gross margin was 34 percent compared 
   with 36.7 percent in the third quarter of fiscal 1995 and 36.1 percent 
   in the comparable period last year, reflecting a change in business mix 
   towards new multivendor service and support offerings.  
         "As the U.S. dollar continued to be weak in a number of 
   countries, we experienced a 3 percentage point favorable impact on the 
   company's revenue from the third to fourth quarter," said Vincent J. 
   Mullarkey, vice president and chief financial officer.  "Non-dollar 
   denominated costs and competitive responses, however, substantially 
   offset the positive impact."
         Mullarkey said the company continued with its program to improve 
   asset management and for the second consecutive quarter generated a 
   positive cash flow from operations before restructuring.
         "I am pleased with the speed with which we have made 
   corporate-wide changes," Mullarkey said.  "Digital at the end of the 
   1995 fiscal year is much stronger financially than a year ago.
         "Our product and service offering is at its strongest ever and we 
   are gaining share in our strategic markets," Mullarkey continued.  "Our 
   restructuring remains on our aggressive plan and we continue to 
   strengthen our balance sheet.  All of these points are clear proof that 
   we continue to make solid progress towards our short term financial 
   goals."
   
Consolidated Statements of Operations
   (in thousands except per share data)                  
                         
                                           THREE-MONTH PERIOD ENDED        
         
                                     JULY 1, 1995             JULY 2, 1994
                         
   Product sales................   $    2,132,347           $    2,224,702
   Service and other revenues...        1,617,520                1,698,272
   Total operating revenues.....        3,749,867                3,922,974
   Cost of product sales........        1,467,622                1,663,840 
   Service expense and cost 
     of other revenues..........        1,066,945                1,084,462 
   Research and engineering 
     expenses...................          252,977                  338,915   
   Selling, general and 
     administrative expenses....          789,725                1,292,071   
   Restructuring charges........             -                   1,206,000
   Operating income/(loss)......          172,598               (1,662,314)
   Net interest expense.........            7,693                   10,335
   Income/(loss) before income 
     taxes.....................           164,905               (1,672,649)
   Provision for income 
     taxes.....................             5,139                   73,711      
   Net income/(loss)...........           159,766               (1,746,360)
   Dividend on preferred 
     stock......................            8,875                    8,875 
   Net income/(loss) applicable 
     to common stock............   $      150,891           $   (1,755,235)
   Net income/(loss) applicable 
     per common share (1).......   $         1.01           $       (12.64)
   Weighted average common 
     shares outstanding.........          149,931                  138,905 
                         
                 
                                          TWELVE-MONTH PERIOD ENDED        
                                     JULY 1, 1995             JULY 2, 1994
 
   Product sales................   $    7,616,441          $     7,191,251 
   Service and other revenues...        6,196,621                6,259,539 
   Total operating revenues.....       13,813,062               13,450,790
   Cost of product sales........        5,397,723                4,968,025 
   Service expense and cost of 
     other revenues.............        3,993,970                3,943,612 
   Research and engineering 
     expenses...................        1,040,028                1,301,347 
   Selling, general and 
     administrative expenses....        3,272,913                4,027,869 
   Restructuring charges........             -                   1,206,000
   Operating income/(loss)......          108,428               (1,996,063)
   Net interest expense.........           32,771                   23,931
   Income/(loss) before income 
     taxes and cumulative effect 
     of changes in accounting 
     principles.................           75,657               (2,019,994)
   Provision for income taxes...           18,342                   85,043
   Income/(loss) before 
     cumulative effect of changes 
     in accounting principles...           57,315               (2,105,037)
   (Benefit)/charge due to 
     cumulative effect of changes 
     in accounting principles...          (64,503)                  51,026
   Net income/(loss)............          121,818               (2,156,063)
   Dividends on preferred stock            35,500                   10,650
   Net income/(loss) applicable 
     to common stock............   $       86,318          $    (2,166,713)
 
   Per common share (1):           
   Income/(loss) applicable 
     before cumulative effect of           
     changes in accounting 
     principles................    $         0.15          $        (15.43)
   Benefit/(charge) due to 
     cumulative effect of changes 
     in accounting principles...             0.44                    (0.37)
   Net income/(loss) applicable 
     per common share...........   $         0.59          $        (15.80)
   Weighted average common 
     shares outstanding.........          146,331                  137,090 
 
   Note (1):  Per common share amounts are calculated based on the weighted 
   average number of common shares and common share equivalents outstanding 
   during periods of net income, after deducting applicable preferred stock 
   dividends.  Per share amounts are calculated based only on the weighted 
   average number of shares outstanding during periods of net loss, after 
   deducting preferred stock dividends.                    

 Selected Balance Sheet Data - Q4 FY95
   (in thousands except per share data)                  
                         
   Cash and cash equivalents........               $     1,602,148 
   Accounts receivables, net........                     3,219,082 
   Inventories......................                     2,053,620 
   Prepaid expenses, deferred income 
     taxes and other current assets.                       397,047 
   Total current assets.............                     7,271,897 
   Property, plant and equipment,net                     2,268,722 
   Other assets.....................                       406,533 
   Total assets.....................                     9,947,152 
   Bank loans and current portion of
     long-term debt.................                        14,371 
   Accrued restructuring costs......                       492,046 
   Total current liabilities........                     4,246,292 
   Long-term debt...................                     1,012,885 
   Postretirement and other 
     postemployment benefits........                     1,159,679 
   Total liabilities................                     6,418,872 
   Stockholders' equity.............                     3,528,280 
   Book value per common share......              $          20.89 
   Non-U.S. revenues................QTR           $      2,512,275 
                                                  or           67%
                                    YTD           $      8,998,552 
                                                  or           65%
                         
   Employee population (approximately)                      61,700 


                       FOR DIGITAL INTERNAL USE ONLY

|   Alpha product revenues grew by 32 percent over the prior year, ...

	Hmm .. I'm surprised it is that low. I wonder what the erosion
	rate is of the VAX base? Are we even keeping pace?

|         After 12 quarters of explosive market share gains, revenue growth 
|   in the personal computer business moderated in the fourth quarter.

	Isn't that comparing apples and oranges? Have we stopped gaining
	market share now?

>Per

    We made a profit...again!  I'm gonna go have a beer on that one, enjoy
    it for a few days, bask in the glow, etc. before I even *think* about
    dissecting it piece by piece.
    
    My own personal joy at seeing this could only be rivaled by Susan
    Powter being banned permanently from all media.
    
    								Tex

> Susan Powter

Who?

    Loud, obnoxious, crew-cut, bleach-blond "fitness guru" who's rallying
    cry is "stop the madness".  I, personally, would like to supplement
    Somalia's protein consumption with her.  She's being sued here in
    Dallas, filing Chapter 11 (bankruptcy), etc.  For some obscure reason,
    her squeenched face keeps cropping up in about every magazine besides
    National Geographic.
    
    Sorry.  Back to our regularly scheduled topic...

    
    	I, two, like making Digital making money again. It feels much
    better than the obverse.
    
    	Think I'll join Tex for that beer...
    
    
    		the Greyhawk

    
    Hand me one as well. Negative overanalysis makes me thirsty.

    Bar's open.  Belly up and call your poison boys, it's time for a little
    celebration!

    
         Nestle's Quik.  Stirred, not shaken.  No hormone-milk.
    
         Nice to see some positive life-signs from the company.
    
                                   Greg

    Hmm! We got Tex, Greyhawk, and even Greg Bruno. Must be a party! Next
    round is on me!
    
    Reb