Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: mr.mark who wrote (31958)	6/22/1999 9:04:00 PM
From: Mang Cheng	Respond to of 45548

"3Com CFO/Conference Call -2: Plans To Boost Systems Biz " By Cecilia M. Kang PALO ALTO, Calif. (Dow Jones)--3Com Corp.'s (COMS) revenue in its first and third quarters of fiscal year 2000 will likely fall from year-ago levels due to unfavorable seasonal factors, Chief Financial Officer Chris Paisley said Tuesday. Paisley said in a conference call after the release of fourth-quarter earnings that the summer and winter months are historically slow sales periods for the industry and will affect top line growth. Everen Securities analyst Christin Armacost said 3Com's revenue projections are also consistent with other trends in the industry, such as price pressures and consolidation. "In the next several quarters you will see very little top line growth and maybe see declines in their business," said Armacost. "But as an investor, you have to dig below the total revenue line and track the progress 3Com makes in its systems business." She said systems products are where the company competes with giant Cisco Systems and Cabletron Systems Inc. (CS). 3Com Chief Executive Eric Benhamou said in the conference call that the Santa Clara, Calif. company will continue to move away from mature client/access products - like modems and network cards - that have weighed on sales, and will increase research and development in the higher-growth systems business and emerging technologies. Sales for 3Com's struggling client/access products fell 10% in the fourth quarter, while systems products sales rose 17% to $784.7 million. 3Com's systems products make up 55% of total business. The company said it plans to reduce client/access products to 25% of total business in the next four quarters. Sales of the popular Palm handheld devices are growing, 3Com said, surpassing 10% of total sales in the fourth quarter. Benhamou said he is "cautiously optimistic" about the outlook for 3Com's latest handheld wireless data portal, Palm VII, as initial market response has been good. As reported, 3Com beat analysts' fourth quarter earnings estimates by one penny, posting earnings of 24 cents a share compared with 17 cents a year ago. Revenue was $1.42 billion in the quarter, up 3% from $1.38 billion from a year ago but flat compared to third-quarter levels. Paisley said 3Com's balance sheet improved in the quarter as cash holding increased to $1.66 billion from $1.08 billion in the year-ago quarter. Fourth-quarter inventory fell to $354 million from $645 million a year ago. U.S. sales were up 7% in the quarter, accounting for 54% of total sales, while international sales were down 1% from the same quarter in 1998. The chief financial officer said economic fundamentals of Asia are showing signs of continued strength. -By Cecilia Kang; 650-496-1367 Mang