Digital and Intel Take a Pounding

NEW YORK — Digital Equipment Corp. reported a massive quarterly loss Thursday, setting off a Wall Street selling spree that left the shares of the nation’s second-biggest computer maker nearly 10% lower.

Hard economic times also surfaced at Intel Corp., the leading U.S. computer chip manufacturer, which said its net income slipped 6.6% for the first quarter ended March 28.

Maynard, Mass.-based Digital blamed a $294.1-million, or $2.36 a share, loss in its third fiscal quarter ended March 28 on a stubborn recession in the global computer market that flattened its sales.

A year ago, the computer giant earned a profit of $116.6 million, or 94 cents a share.

Digital’s shares plunged $5.25 lower to $48.25 on the New York Stock Exchange.

The company said its loss stemmed from the global economic slowdown, especially in Europe and Japan, which prompted large corporations to cut back spending.

Digital said the quarterly results were also hurt by unfavorable currency fluctuations.

The computer maker, which has been struggling to trim its staff for two years amid flat sales and low profitability, said it remains wary about the future, given the economic uncertainty.

Its work force declined by 3,500 in the quarter, bringing its total worldwide force to 106,000 employees from 126,000 at the beginning of the restructuring in 1989, the company said.

Santa Clara, Calif.-based Intel said net income fell to $184 million, or 86 cents a share, for the quarter, compared to $197 million, or 95 cents a share, a year earlier.

Intel said much of the fall in profit level was due to one-time charges related to legal squabbles. Intel put $35 million in reserve to cover payment to Hughes Aircraft Co. in a patent-infringement settlement and another $15.2 million for Advanced Micro Devices Inc. of Sunnyvale, Calif., as part of an arbitration decision.

Intel stock closed 25 cents lower to $57.24 on the NASDAQ over-the-counter market.