Digital has blamed a disastrous first quarter loss on its recent shift away from the indirect channel.
The company, which has made a loss in five of the past six years, shocked analysts with a loss for its first quarter ended 28 September of $65.9 million, or 48 cents a share, three times the figure predicted by Wall Street analysts.
Analysts had expected Digital to make a loss of about 14 cents a share, with even the most pessimistic forecasting only a 30 cent loss.
Turnover for the company fell 11 per cent to $2.9 billion, about $200 million below analysts' forecasts.
Digital chairman Bob Palmer said the figures were due to Digital's U-turn in its channel strategy implemented at the start of Q1. This increased the number of customers sold to directly, swinging the balance of power away from resellers - a reversal of the decision made two years ago to deal with most accounts through partners.
'While that change was necessary, it got a slow quarter off to an even more sluggish start,' said Palmer.
The change in sales model was made to reduce conflict between direct and indirect channels and to improve customer service. 'We are concentrating on substantive, permanent improvement, not quick fixes,' he said.
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