BOSTON — Digital Equipment Corp. capped its worst financial year ever Thursday by reporting a record $1.86-billion quarterly loss, including an enormous one-time charge to cover the cost of job cuts and plant closings.
Even without this $1.5-billion charge against earnings, the computer company would have lost $188 million on its operations. It blamed the results on weak revenues, which were hurt by the recession and price competition across the industry.
The loss for the three-month period that ended June 27, equal to $14.76 a share, compared to a loss of $871.3 million, or $7.08 a share, in the same period last year, when Digital embarked on another expensive cost-cutting program.
Sales for the period, which was Digital's final quarter of its fiscal year, totaled $3.9 billion, down 1% from $3.94 billion during the same time last year.
For its fiscal year, Digital had a loss of $2.79 billion, or $22.39 per share. That included another charge of $485 million to deal with accounting changes for retirement benefits.
The annual loss compared to a loss of $617.4 million, or $5.08 per share, in the prior year.
Sales in the latest fiscal year totaled $13.93 billion, virtually unchanged from $13.91 billion the year before.
The magnitude of the loss added to the sense of turmoil at the world's second-largest computer maker, which is changing leadership after a 35-year reign by co-founder Kenneth Olsen.
Olsen abruptly announced last week he was stepping down as Digital's president, after coming under fire in recent months over the company's problems.
"We face an economic slowdown in virtually every major geography, particularly in Europe and Asia," Olsen said in a statement. "We are taking actions designed to increase revenues, increase market share, reduce costs and improve our efficiency."
Digital, which employs 113,800 people, has eliminated more than 23,000 jobs since 1989.
The company, based in Maynard, Mass., west of Boston, did not disclose how many jobs would be eliminated in its current fiscal year. But analysts have estimated it could be as high as 15,000.
Digital will pay for the cutbacks through a $1.5-billion charge absorbed in the fourth fiscal quarter. Last year, the company took a $1.1-billion charge, which paid for layoffs and early retirement packages for 10,300 people.
Digital's stock fell 62.5 cents a share to close at $39.875 Thursday on the New York Stock Exchange.
Digital hopes to please its current customers and win new ones with a high-powered chip the company developed, called Alpha.