PALO ALTO, Calif. (Dow Jones)--U.S. Robotics Corp. (USRX) capitalized on its
new high-speed modem technology to drive good revenue growth and
sharply higher profitability in its second quarter.
Customer demand for the 56-kilobit per second x2 modem was ''smashing,''
and the product proved to be a significant portion of modem products shipped
in the quarter, said Casey G. Cowell, chief executive of the Skokie, Ill.,
company.
Just as important, the product's higher margin lifted the gross margin
for the quarter to 49% from 42% in the year-ago quarter, raising overall
profitability.
U.S. Robotics also told analysts on a conference call that it planned
to ship its next generation Total Control hub technology during the summer.
The product, which Internet service providers will use to receive dial-in
calls from customers' modems, will offer sharply increased capacity - more
than 3,000 modem connections per unit - and is expected to present a better challenge
to companies such as Ascend Communications Inc. (ASND).
Low production costs also will enable the company to capture a good margin
on the product or price it aggressively, said one investor who listened
to the call. Its weakness, however, seems to be in its
incorporation of ISDN technology, said another.
Cowell said he was bullish about prospects for the company's product
lines through the rest of the year, but didn't provide specific growth
estimates. The quarter is likely the last U.S. Robotics will report as
a separate company because of the expected June closing of its merger with
3Com Corp. (COMS).
(MORE) DOW JONES NEWS 04-23-97 |
