'BLOODY KNEES' AT DEC
Robert Palmer is on the spot--again. Digital Equipment ended fiscal 1996 with a net loss of $112 million on sales of $14.6 billion. Despite four years and $1.2 billion in restructuring charges to cut its staff in half, DEC still lags rivals in profitability per employee. still lags rivals in profitability per employee.
Palmer, 55, a long-distance runner who became CEO in 1992, tries a sports analogy to explain the latest setback. ``We're going to stumble sometimes and bloody our knees,'' he says. ``The point is to get up and get on with it.'' But aside from taking a $492 million restructuring charge and shedding another 7,000 workers, Palmer's plan is short on specifics.
In the next few weeks, analysts expect DEC to announce a partner to help make its desktop PCs, a move Palmer doesn't rule out. Meanwhile, DEC's board on July 30 authorized a buyback of up to 10 million shares. But the alliance won't carry DEC around the track. And the buyback covers roughly only as much stock as Fidelity Investments dumped this spring en route to halving its DEC holdings.
Edited by Kelley Holland By Paul Judge
Updated June 14, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.