3Com Shares Fall Amid Concern About 3rd-Qtr Revenue, Profit
Bloomberg - March 2, 1999 03:33 PM ET
Santa Clara, California, March 2 (Bloomberg) -- 3Com Corp. shares fell
as much as 18 percent amid concern that the No. 2 networking company's
fiscal third-quarter profit may lag forecasts on price cuts and
competition from Cisco Systems Inc.
3Com fell 3 11/16 to 27 in trading of 27.9 million shares, making it
the third-most active stock in U.S. markets. Earlier, the shares
touched 25 3/16. The stock has lost 51 percent of its value since
trading as high as 51 1/8 on Dec. 23.
3Com may be losing business to larger rival Cisco, and price cuts on
3Com's modems and computer connector cards are hurting revenue growth,
analysts said. The company last month cut the price of its popular
PalmPilot, its fastest-growing product line. Modems, connector cards
and PalmPilots together contribute more than half the company's sales.
''3Com faces a lot of challenges right now,'' said Craig Johnson,
principal of the market research firm Pita Group in Portland, Oregon.
Prompted by concern over 3Com's revenue growth, at least five analysts
last month cut their quarterly earnings estimates for the company by
at least 2 cents a share to 34 cents, according to First Call Corp.
Santa Clara, California-based 3Com is expected to earn 36 cents a share
in the quarter ended Sunday, the average estimate of analysts polled
by First Call.
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