Ibexx..The WSJ isn't spinning COMS in a negative light. What are you seeing so negatively?
September 22, 1998
3Com Tops Wall Street Estimates
Despite a 12% Decline in Revenue
An INTERACTIVE JOURNAL News Roundup
3Com Corp. topped analysts' expectations for first-quarter earnings,
despite a 12% decline in revenue from the same period a year ago, as
strong sales for new products helped boost the company's profit margins.
The Santa Clara, Calif., networking-gear maker said that net income for
the three-month period ended Aug. 28 was $93.7 million, or 26 cents a
share, compared with a loss of $51.2 million, or 15 cents a share, in the
year-earlier quarter. Revenue, meanwhile, declined 12% to $1.41 billion
from $1.60 billion.
The current quarter's results include a pretax
gain of $10.2 million, or two cents a share,
related to its acquisition of U.S. Robotics
Corp. in 1997. Without that gain, operating income was $86.7 million or
24 cents a share, topping the consensus estimate of analysts surveyed by
First Call of 20 cents a share.
The loss in the year-ago period included a one-time charge of $269.8
million, or 62 cents a share, also related to the merger with U.S. Robotics.
Excluding that charge, net income for 1997's first quarter was $169.6
million, or 47 cents a share.
In Nasdaq Stock Market trading Tuesday, shares of 3Com rose 31.25
cents to $32.375. The earnings announcement came after the close of
trading; in after-hours trading, shares of 3Com rose $1.25 to $33.625,
according to Instinet.
Eric Benhamou, 3Com's chairman and chief executive officer, said he was
satisfied with 3Com's continued efforts to streamline operations and
stabilize revenue generation.
"We are starting to see the benefits of our new product cycle through
stronger sales of recently introduced products across our four customer
markets -- large enterprise, small-medium enterprise, carrier and service
provider, and consumer/SOHO," he said.
3Com's first-quarter systems-products sales were $683.6 million, up 2%
from the fourth quarter. Sales of client-access products rose 3% from the
fourth quarter to $721.9 million.
Prior to the announcement, most experts were interested in 3Com's
inventory levels, which were bloated earlier this year.
3Com told analysts in June that first-quarter revenue would be flat to
slightly higher from the previous quarter's level of $1.38 billion. But
Sanford C. Bernstein & Co. analyst Paul Sagawa Tuesday said 3Com's
revenue will rise somewhere in the mid-single-digit percentage range.
Steve |
