Dec's Seething Shareholders

Digital's management may face a revolt

The frustration felt by shareholders of Digital Equipment Corp. is understandable. Perennial turnaround schemes and management shakeups have failed to restore earnings. Sales of the company's Alpha computers will probably be down for the quarter ending June 30, even as the rest of the industry is booming. Instead of delivering the $1 per share in earnings for fiscal 1997 that CEO Robert B. Palmer promised last fall, analysts say the company will bring in just 65 cents. The company's headline-grabbing suit accusing Intel Corp. of stealing Alpha-chip technology may cost millions--without boosting Alpha's prospects or Digital's. Indeed, Intel countersued on May 28, hinting that Digital's supply of Pentiums could dry up.

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