True to its word, Data General finished the calendar year with the first set of profits in eight quarters, appearing finally to be reaping the rewards of its investment in open systems. Net earnings for the first quarter amounted to $12m, against a net loss of $20.5m for the same quarter last year, on sales […]
True to its word, Data General finished the calendar year with the first set of profits in eight quarters, appearing finally to be reaping the rewards of its investment in open systems. Net earnings for the first quarter amounted to $12m, against a net loss of $20.5m for the same quarter last year, on sales that rose 7% to $312m. Product sales accounted for 64% of total sales, with service revenues making up the remaining 36% proportionally mirroring the previous year. Of the $200m product sales, Data General’s AViiON line contributed 20% over the period with sales of around $40m, and sales of the proprietary MV systems are reported to have stabilised with the introduction of the new Eclipse MV/3000 multiprocessor. Total AViiON sales to date are estimated to be worth $150m – this figure includes part of the disputed $127m contract with the US Geological Survey, and UK director and general manager Tom Weanie says the company has received another $200m in orders, which presumably also includes part of that contract. Data General Europe is reported to have had its strongest ever quarter, in terms of revenues, especially in the UK where says Weanie there has been strong demand for the AViiON product line – which was expanded during the quarter to include the low-end AV 100 – as well as for the latest proprietary MV models, and an encouraging level of service contracts have been won back from third-party maintenance companies – including one worth UKP250,000. The company has been extending its services and working with third-party value-added resellers, with incentives to try and win back lost clients. Data General’s cost reduction programme also seems to have paid off, with operating costs down by $18m compared to the first quarter of 1990. The company is in a strong financial position, with only $50m long-term debts, and $55m cash in the bank, and points out that if the economic recession ever reached crisis point it could live off its balance sheet for two to three years. Wall Street reacted immediately to the company’s return to profit by doubling share values from $4 to $8.25. * Meanwhile, it appears that Data General’s distributed office-oriented object management system business called Hyperdesk is to be 70% owned by Japanese software and publishing company Ascii, with the project’s Data General management owning the other 30%. The new US company will increase its staff from 21 to 50 this year, and expects revenues of $4m in 1992, and $10m in 1993. A date for Japanese sales of the HyperDesk product, which resembles Hewlett-Packard’s NewWave, hasn’t been set, despite plans to start distribution in the US at the end of this year.