3Com Squeezed By Asia And Price Cuts
(01/13/98; 3:46 p.m. EST)
By Gabrielle Jonas, TechInvestor
In a filing with the Securities and Exchange Commission
Tuesday, 3Com said it will soon feel the squeeze from Asia's
financial crisis and from cut-throat price competition in the
56-kilobit-per-second modem market.
3Com said Asian customers could default on money owed and
competition threatened to put a dent in its market share.
The Santa Clara, Calif., company said the already volatile modem
industry -- characterized by vigorous competition,
consolidations, upstarts, and uncertainty over adoption of
industry standards -- is being aggravated all the more by
weakness in Asia.
"The recent instability in the Asian financial markets appears to
have negatively impacted sales, and may continue to negatively
impact sales in those markets in a number of ways," 3Com said
in its filing. "There can be no assurances that the company's
results in any particular quarter will fall within market
researchers' forecasted ranges."
Consensus estimates for 3Com for the third quarter ending in
February are 14 cents a share. Last quarter, ended Nov., 1997,
3Com met expectations of 4 cents a share.
Dolefully, 3Com enumerated the ways Asia's problems could
hurt the company, including increasing competition from local
competitors which could leverage local currencies to offer sales,
the drying up of pools of capital customers need to make
purchases, and the slowing of end-user purchases. |
