Digital Equipment Corporation, a US computer giant which employs more than 1,100 people in Ireland, has reported a strong turnaround in the first quarter with net profits of $25 million (£17 million) or 11 cents per share.

The outcome for the three months to the end of September compares with a loss of $66 million for the first quarter last year.

Chief executive of Digital in Ireland, Mr Peter Donnelly, said the Irish operation contributed to the improved first quarter results.

"We have experienced growth in all of our business areas. Our new services area and our Alpha products sales have been particularly strong, as have sales of PC products," he said. Digital has based its European Software Centre in Galway. Mr Wilf Regan, the general manager of the centre, said that growth was particularly strong in its internet communications business while good progress was made in the development, publishing, manufacturing and telecentre activities.

Digital's other operations in Ireland are in Dublin - the sales and services subsidiary, Digital Equipment Ireland, and the Digital PC Support Centre.

The US group reported total first quarter revenue of $2.96 billion, up 2 per cent. Product sales contributed $1.58 billion, a 4 per cent rise. But service revenue slipped to $1.38 billion from $1.39 billion.

Group chairman, Mr Robert Palmer, said he was "very encouraged by the performance, given the seasonal factors that traditionally affect our first-quarter results".

Separate results for the Irish or European operations are not disclosed. But chief financial officer, Mr Vincent Mullarkey, said revenue growth in Europe was in double digits.