Earnings may be below estimates, sorry if this got posted:
By Susan Nadeau
CHICAGO, April 22 (Reuter) - U.S. Robotics Corp's fiscal
second quarter earnings, slated for release on Wednesday, may
be slightly below estimates because of initial delays in
shipping its high-speed x2 computer modems, analysts said.
According to First Call, the consensus of analysts'
estimates is $0.75 a share versus $0.55 last year. U.S.
Robotics is due to release earnings for its second quarter
ended March 31 after the market closes on Wednesday.
"I think they'll make it, but it could be a penny or so
light," said John Grangaard, an analyst with GS2 Securities,
adding that the initial x2 delay could cause a shortfall.
U.S. Robotics on February 24 said it began shipping its
proprietary x2 modems, which allow computer connections over
telephone lines at speeds up to 56 kilobits per second, or
roughly twice as fast as today's common standard modem.
The x2 technology is not compatible with similar technology
backed by an alliance led by Rockwell International Corp
(NYSE:ROK).
Therefore, in order to use an x2 modem, the user must
connect to a U.S. Robotics hub or another x2 modem.
On March 6, the company said it began shipping its x2 hub
technology. The hubs are used by Internet Service Providers and
online services.
U.S. Robotics had originally said it would ship the modems
in January and the hubs in February.
Hambrecht & Quist said in its quarterly earnings outlook
that it expects U.S. Robotics will maintain or extend its lead
in the 56-K race for market share, but a slight earnings
shortfall in the second quarter was a possibility.
"We believe U.S. Robotics could be slightly shy of our
March quarter estimate of $0.74 in EPS on $695 million in
revenues," the firm said in a published report. "Despite strong
sell-through of x2 modems in March, delays earlier in the
quarter could cause the company to have a back-end loaded
quarter (again)."
Amar Senan, an analyst with Volpe, Welty & Co, said he
expects the company to meet expectations, with solid sales of
the system hubs offseting modem delays. Key customers include
America Online Inc (NYSE:AOL).
"I think the quarter is fine," Senan said. "The x2 product
did not ship until much later, but the systems business is
strong."
Analysts said they will be watching the balance sheet
fundamentals as U.S. Robotics prepares to merge with networking
company 3Com Corp (NASDAQ:COMS). They said U.S. Robotics shares have
been trading in line with 3Com ahead of the merger, which is
due to close this summer.
Copyright 1997, Reuters News Service |
