US computer profits weaken

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The Independent Online
DISAPPOINTING results at leading US computer companies - blamed on weak sales in Europe and fierce competition at home - sent industry share-prices tumbling yesterday, led by the chip-maker, Intel.

Intel shares lost more than dollars 3 at the outset of trading yesterday, following the release late on Tuesday of fourth-quarter earnings slightly below Wall Street's estimates. The sell-off coincided with the announcement of deep losses at Digital Equipment, whose revenues fell almost 10 per cent in the final quarter of 1993.

Results at other well-known computer firms, including software producers Microsoft and Borland International, and the workstation manufacturer Sun Microsystems, also failed to meet investor expectations.

Intel's quarterly earnings - up 38 per cent to dollars 594m - included indications of narrowing profit margins, analysts said. Far more alarming were results from Digital, whose turnaround appears to have stalled. It lost dollars 72m, roughly the same loss as in 1992, but much worse than analysts' estimates of a six-cents-a-share profit.

Digital said that while it had expected sales to fall somwhat, it was 'not satisfied' with either its turnover or its loss during the quarter. 'It took several years for the company to get into this situation and it is taking some time for us to restore profitability and growth,' the firm said in a statement.

Microsoft, which produces the MS-DOS and Windows operating systems for personal computers, released second-quarter results after close of trading last night, showing earnings of dollars 289m, or 95 cents a share, on revenues of dollars 1.23bn, up from dollars 236m on revenues of dollars 938m a year ago. Some forecasts had Microsoft earning about dollars 1.02 a share in the second quarter.