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3Com Saw Weak Revenue Growth in 3rd Qtr, CEO Benhamou Says
Washington, March 18 (Bloomberg) -- 3Com Corp. Chairman and
Chief Executive Eric Benhamou said the weak revenue growth 3Com
saw in January persisted throughout the third quarter, which
ended on Feb. 28.
Benhamou told the Bloomberg Forum that 3Com and other
networking companies saw waning sales growth as customers slowed
orders while they grappled with new technology choices.
``There has been a broad admission among many vendors in the
industry that they have seen a decline in the rate of growth in
the last two or three months,'' Benhamou said.
3Com reports its quarterly results Thursday afternoon. There
has been concern among analysts that the company might miss its
earning and revenue targets.
3Com is expected to have profit of 46 cents a share, based
on the average estimate of 29 analysts from IBES International
Inc. The company had net income of $74.6 million, or 42 cents a
share, in the year-earlier third quarter.
Benhamou declined to comment on the quarterly results.
Paul Johnson, an analyst at Robertson Stephens & Co. who has
been critical of 3Com, said yesterday in a report that the
company would make its quarterly numbers. Johnson is forecasting
earnings of 46 cents on revenue of $788 million.
Benhamou said that some large companies were suffering from
``technology indigestion.''
Corporations were confronted by so many new technologies
designed to link computers to networks that they hesitated before
buying, he said. He mentioned the choice between ethernet and a
faster version of the technology that lets PCs talk to each
other.
``All of these choices are hitting at the same time and
inevitably it causes people to pause a little bit before they
dive in,'' Benhamou said. He spoke to the Bloomberg Forum during
a break from the ``Networked Economy'' conference in McLean,
Virginia.
Still, Benhamou said companies need to enlarge their
networks, and the size of the average networking order is rising.
``The growth rate we've been talking about for a long time,
30 percent to 50 percent, continues to be achievable, even though
it was probably not achieved in the last three months,'' Benhamou
said.
3Com last month agreed to buy modem maker U.S. Robotics
Corp. for $6.6 billion in stock.
3Com shares rose 3/8 to 33 3/4. |
