Immi, you are correct, this is old news. A month ago Eric Benhamou
said: "The regions that showed more sluggish growth compared to their
long term potential, namely Japan, Germany and France, seem to be in
the same predicament today".
Chris Paisley, Chief Financial Officer, said: "We expect gross margins
to decline in the coming quarter, as the blended average of 50.8%,
noted above, included abnormally higher gross margins from the U.S.
Robotics March results than is typical. As discussed on their
conference call in April, these margins are not sustainable. However,
beyond Q1, we would expect gross margins to begin to improve, in part
due to synergies".
And, in one of the most intriguing comments, Chris said: "It is
difficult to predict if gross margin declines in the near term can
be more than offset by a reduction in expenses as a percentage of
sales, meaning that the short term movement in operating margin is
unclear. However, beyond the summer quarter, we expect operating
margin to improve".
3com.com
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