My favorite company 3bomb warns.....what a bunch of jokers!
3Com Discontinues Consumer Cable and DSL Modems, Gives
Guidance for Q4, FY01 Results
SANTA CLARA, Calif., Jun 7, 2001 (BUSINESS WIRE) -- Today 3Com Corporation (Nasdaq: COMS chart, msgs) announced it will discontinue its line of consumer cable and digital subscriber line (DSL) modems. This announcement does not impact 3Com's continued focus on business DSL routers and modems which are products that target small business and enterprises and remain a critical part of 3Com's strategy. 3Com is also updating the market outlook for its fiscal fourth quarter ended June 1, 2001.
Beginning in December 2000, 3Com embarked on a program to return to profitability and position the company for growth. An important part of the program is discontinuing product lines that lack the potential to deliver superior growth and financial returns. There is an industry-wide glut of consumer cable and DSL modems that has driven down prices and margins. Therefore, 3Com is discontinuing its consumer cable and DSL modem product lines to focus on technologies and markets that can deliver greater shareholder value. All existing customer orders and warranties will be honored.
"This announcement is consistent with the direction 3Com announced in December," said Bruce Claflin, 3Com president and chief executive officer. "Our strategy is to focus on businesses and service providers, delivering advanced networking solutions that leverage leading edge technologies. These are areas that play to 3Com's strengths."
Updated Financial Guidance for Q4 FY01
For the fourth fiscal quarter ended June 1, 2001, 3Com anticipates revenues will be in the range of US$450 million to $475 million. Lower sales volumes negatively affected manufacturing utilization and led to increased provisions for excess inventories. This, combined with one-time charges related to 3Com's restructuring efforts, will result in gross margins that are expected to be negative. Operating expenses, excluding restructuring charges, non-recurring costs, and amortization of goodwill, are expected to reflect more savings than originally expected. Cash and equivalents are expected to be between $1.5 - $1.6 billion. 3Com's fourth quarter results will be announced on June 26, 2001.
"Business conditions worsened in 3Com's fourth quarter," said Claflin. "However, 3Com is taking the steps necessary to achieve future profitability in this unfavorable climate. Today's announcement to discontinue consumer DSL and cable modem products is an important part of our plans."
About 3Com Corporation
3Com simplifies how people connect to information and services through easy-to-use, connectivity products and solutions for businesses. The company also provides access infrastructures and IP services platforms for network service providers. For further information, visit www.3com.com or the press site at www.3com.com/pressbox.
Safe Harbor: The anticipated quarterly results contained in this release are forward-looking, and actual results could differ materially, based upon actual shipments and product mix during the remainder of the quarter, as well as any accounting adjustments made during the quarterly close. For further discussion of risk factors applicable to 3Com's business, please refer to the company's report on form 10-Q for the quarter ended March 30, 2001.
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