PalmPilot sales lift 3Com profits 35%
By Jeffry Bartash, CBS
MarketWatch
Last Update: 5:34 PM ET Jun 22,
1999
NewsWatch
Earnings Surprises
SANTA CLARA, Calif. (CBS.MW) -- 3Com Corp.
said Tuesday that fourth-quarter profits from
operations climbed 35 percent as the company
boosted sales of its popular handheld PalmPilot
electronic organizer.
Separately, the company (COMS: news, msgs) said it
would buy back up to 15 million shares. 3Com
announced a 10 million-share buyback when it
released third-quarter results in March.
The world's
second-largest
maker of
computer
networking
products said
profits
excluding
special items rose to $88 million, or 24 cents a share,
in the fourth quarter ended May 28, up from $65.9
million, or 18 cents, a year earlier.
3Com was expected to earn 23 cents a share,
according to the consensus estimate of analysts
surveyed by First Call Corp.
Sales, however, climbed a meager 3.6
percent to $1.42 billion from $1.37
billion a year earlier.
Although sales of the PalmPilot are
surging, revenue from phone
modems, PC-connector cards and
related items have been declining
amid intensified competition. That's
prompted the company to focus more
on the Internet and products for
lucrative high-speed web access.
That push helped lift sales of network
systems, which includes switches,
routers and other products used by
corporations, Internet service
providers and phone carriers, 17
percent to $784.7 million. It also
accounted for a record 55 percent of
total sales, 3Com said.
Those gains were mostly offset by a
10 percent decrease in client-access
sales to $630.9 million, which
includes the modem business.
Shares of 3Com edged up 9/16 to 31 1/2 ahead of the
earnings report. Results were released after the
markets closed. |
