U.S. Robotics Posts Net Gain Of 77% for the 1st Quarter
An INTERACTIVE EDITION News Roundup WSJ
U.S. Robotics Corp., making what may be its final earnings report before it is acquired
by 3Com Corp., reported that first-quarter earnings jumped 77% on a 52% increase
in revenue.
The Skokie, Ill., company said that earnings rose to $91.5 million, or 95 cents a share,
from $51.6 million, or 55 cents a share, a year earlier. Revenue jumped to $690.2
million from $454.5 million.
The results for the latest quarter include a gain of $17.9 million for a tax benefit.
Excluding the gain, net income was $73.5 million, or 77 cents a share, roughly in line
with expectations.
U.S. Robotics in February agreed to be acquired by computer-networker 3Com, a
deal that has been criticized by some holders as the shares of the two companies
faded.
Indeed, before the acquisition was announced, Robotics shares were fetching $61,
while 3Com shares were trading at $39. Since then, their shares have faded, and on
Wednesday, Robotics' shares closed at $47, up 12.5 cents, while 3Com closed at
$27.50.
However, Wednesday's earnings report, which was released after the close of Nasdaq
trading, powered U.S. Robotics' shares higher in after-hours activity. Its shares were
quoted at $49, according to Instinet, an electronic trading system.
U.S. Robotics has defended the deal, saying that it is focused on long-term strategies
and value-building rather than on short-term market swings.
U.S. Robotics attributed its revenue growth in the latest quarter to continuing strong
demand for its products in all of the markets that it serves worldwide, noting that higher
unit sales of both network systems products and PC-related products were the
primary reason for the increase from last year.
Also, the company said it continued to make significant investments during the quarter
to expand its sales force world-wide.
U.S. Robotics said it expects to complete its merger with 3Com in June 1997. If it
does, it won't separately report results for the current quarter.
U.S. Robotics recently rolled out its first modems that can receive information from the
Internet at nearly 56,000 bits per second, about double the speed of most modems. |
