Wang Laboratories’ Profit Jumps Threefold in Year

Wang Laboratories missed a 15% growth target for sales in fiscal 1986--a goal that founder and Chairman An Wang set earlier in the year--but a threefold increase in profits likely will soften any disappointment.

The Lowell, Mass.-based maker of office computer systems said net earnings for the year ended June 30 were $50.9 million, up from $15.5 million in fiscal 1985. Sales during the year were $2.643 billion, a 12% increase from the $2.352 billion in 1985.

The improvement appears to put Wang back on a solid growth trail following a difficult year in 1985, when profits dropped 93% and sales grew only 9%--bringing to a screeching halt decades-long growth rates of 40% to 50%. Wang began refocusing its product strategy while paring costs, and analysts see this year’s financial results as a testament to the transitional efforts.

“I think it’s doing the right things to solidify its position as the No. 3 vendor in office systems (after IBM and Digital Equipment),” said analyst Christine Hughes of the Gartner Group securities firm in Stamford, Conn.

For the fourth quarter, Wang said it earned $800,000, compared to a $109-million loss in the final quarter of 1985. For the three months, its revenue increased 13% to $716.8 million.

The company said net earnings for the fourth quarter of 1986 were favorably affected by $19 million resulting from a required accounting change and by gains on the sale of real estate and other items amounting to $14 million. However, the company said, the gains were offset by a $10-million provision for estimated costs of a voluntary separation and early retirement program announced earlier this month.