New Life For Old Dec

Is Digital Equipment headed for an IBM-like resurgence? Wall Street thinks so. Tough cost-cutting and asset sales are proving that CEO Robert Palmer is serious about turning around the computer maker. Since the June quarter's stunning $1.7 billion loss, Palmer has raised $500 million with asset sales and has slashed expenses by $1.8 billion. To expand still-shrinking revenues, Palmer is heavily promoting Alpha AXP computers, though he still must contend with falling sales of DEC's high-margin VAX machines. Investors, afraid of missing an IBM-style stock rally, have driven DEC's shares up 43% since their July low. And the stock still looks cheap: At around $27, it's just above the company's book value.

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