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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (3812)	9/26/2000 5:18:45 PM
From: Dealer	Read Replies (1) \| Respond to of 65232

COMS-3COM--3Com loss narrower than expected By Deborah Adamson, CBS.MarketWatch.com Last Update: 5:03 PM ET Sep 26, 2000 NewsWatch Latest headlines SANTA CLARA, Calif. (CBS.MW) - 3Com on Tuesday posted a much narrower loss for the first quarter than Wall Street had expected, as the effects of its business strategy shift didn't do the damage that analysts and the company had anticipated. 3Com (COMS: news, msgs) reported a loss, excluding one-time and non-operating items, of $41.3 million, or 12 cents a share, blowing away analysts' estimates of a loss of 33 cents a share. Last year, the computer networking company made a pro forma profit of $113.7 million, or 32 cents a share. 3Com had projected a loss of $67.5 million to $90 million, or 19 cents to 25 cents a share. The pro forma operating loss was $99 million. Net loss from continuing operations was $63.7 million, or 18 cents. 3Com had projected a loss of $130 million to $160 million. Including all the items and discontinued operations, the net loss was $59.2 million, or 17 cents a share, compared with a net income of $137.5 million, or 38 cents a share. Total sales were $933.8 million, including $127.5 million from the analog modem and LAN/WAN high-end chassis businesses, which 3Com had since exited. Excluding sales from these discontinued businesses, 3Com's sales for the quarter were $806.3 million, up 20 percent sequentially. In the fourth quarter, 3Com announced that it's refocusing its business on high growth markets such as broadband access, IP telephony, wireless technology and others. The first quarter's pro forma performance improved upon last quarter's, with sales rising 22 percent and the loss narrowing by 75 percent. The gross margin improved to 36 percent from 26 percent. Total operating expenses for the just-concluded quarter were $439.7 million, down from $453.7 million in the fourth quarter. "The close of our first quarter marks the completion of our restructuring," said Eric Benhamou, 3Com's chairman and chief executive, in a statement. "The transformation milestones and business objectives...were completed on or ahead of schedule." Shares of 3Com were down by 1 to $12.94 in after-hours trading. Deborah Adamson is a reporter for CBS.MarketWatch.com.