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Technology Stocks : ADSL IS DEAD

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To: elmatador who started this subject	6/8/2001 6:21:43 AM
From: elmatador	of 135

Profit warning from 3Com as it bows out of broadband modem business By Elizabeth Biddlecombe, Total Telecom 08 June 2001 Santa Clara, California-based 3Com issued a profit warning for fourth quarter results while announcing that it is pulling out of the cable and digital subscriber line modem business. In its third consecutive profit warning the company said that revenues for the three months up to June 1st will be between US$450 to $475 million not between $550 to $600 million as previously announced. Results will be released on June 26th when it is expected that losses will be reported due to excess inventories and one-time charges related to the restricting program. "Business conditions worsened in 3Com's fourth quarter", said Bruce Claflin, chief executive, in a statement. "However 3Com is taking the steps necessary to achieve future profitability in this unfavorable climate." The company will also cease to make high-speed consumer modems in what has become a trend this week with Alcatel announcing it is also exiting the business. The job cuts this entails are part of the 3,000 redundancies announced in May and the move is part of a restructuring plan announced in December 2000. "There is an industry-wide glut of consumer cable and DSL modems that has driven down prices and margins", read a statement issued by the company. "3Com is discontinuing its consumer cable and DSL modem product lines to focus on technologies and markets that can deliver greater shareholder value." This moves leaves 3Com with a business targeted at making carrier and enterprise equipment as well as home networking kit. Business DSL routers and modems for small businesses and enterprise will continue to be part of the 3Com portfolio.

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