Texas Instruments Posts Loss; Digital Net Jumps

Digital Equipment Corp. said its third-quarter profit jumped 86% from a year earlier, while Texas Instruments, a leading semiconductor maker that also produces computers, said it suffered a $23.8-million loss in the first quarter. Both companies said market conditions remained generally sluggish in the computer and related industries.

Digital, the nation’s second-largest computer maker behind IBM, said net income for the quarter ended March 29 climbed to $170.3 million from $91.7 million a year earlier. Revenue rose 14% to $1.93 billion from $1.69 billion.

Digital, based in Maynard, Mass., said the introduction of new computer systems earlier this year and the company’s cost-cutting efforts helped lift revenue and earnings in the latest quarter.

“The increasing mix of new products, together with reduced manufacturing costs, combined to yield significant improvements in the company’s gross (profit) margin,” James M. Osterhoff, Digital’s chief financial officer, said in a statement.

For the first nine months of its fiscal year, Digital’s net income rose 9.4% to $378.8 million from $346.2 million a year earlier. Revenue climbed to $5.41 billion from $4.83 billion.

Dallas-based Texas Instruments said “weak market conditions and severe pricing pressures in semiconductors” produced its latest quarterly loss despite continued cost-cutting efforts.

The company said the loss included a $13-million deficit from operations and a $10.8-million charge related to its recent redemption of debentures.

A year earlier, Texas Instruments earned $9.1 million.

First-quarter revenue fell 11% to $1.15 billion from $1.29 billion.

The company’s semiconductor losses “narrowed substantially from the fourth quarter of last year,” and orders in the latest quarter “were up strongly from the depressed levels of 1985,” Jerry Junkins, president and chief executive, said in a statement.

But the level of semiconductor sales “continues to be below what is needed to support acceptable profitability” at Texas Instruments, he said.

Junkins also said cost cutting helped Texas Instruments’ computer business make money in the first quarter, even though unit shipments trailed those of a year earlier, when the business showed a loss.