Compaq Computer Corporation yesterday reported a $3.6 billion (£2.6 billion) second-quarter net loss related to the acquisition of Digital Equipment Corporation.

Excluding the cost of acquiring Digital, which came to $3.235 billion, as well as $393 million to cover the closure of certain facilities, net income from April to June was $32 million or two cents a share. Those results compared with $257 million or 17 cents in the second quarter of 1997.

Compaq Computer employs 250 people in its Dublin call centre, while 500 people work for Digital in Galway and another 850 are employed in Digital's sales and call centre services in Dublin.

Including the costs, the second quarter produced a loss per share of $2.33. Wall Street experts were looking for Compaq to break even in the quarter.

Second quarter sales rose to $5.832 billion from $5.515 billion.

Compaq, which took over Digital on June 11th, had warned that the transaction would mean the elimination of 17,000 jobs from a combined total workforce of 84,000.

In its statement yesterday, the company said it had established a restructuring reserve of $1.5 billion to cover the elimination of duplicate facilities along with employee separations and relocations.

"The third quarter will largely be transitional, focused on both the integration of products and services, and the achievement of revenue and cost synergies," said Mr Earl Mason, Compaq chief financial officer.