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: SHW who wrote (10606)	11/20/1997 9:54:00 PM
From: jim bender	Read Replies (2) \| Respond to of 45548

Will 3Com Take Earnings Hit To Solve Inventory Problem? By JOELLE TESSLER Dow Jones Newswires Second-quarter earnings estimates for 3Com Corp. have come down notably over the last two weeks amid concerns that the company has been slowing modem shipments to reduce distributors' high inventory levels. But a few analysts are now speculating that the network-equipment maker could substantially miss even the revised projections by significantly curbing modem shipments in the final weeks of the quarter to put the problem behind it. "We believe that 3Com management could elect to substantially miss the November quarter in order to...eliminate the lion's share of modem channel inventory," said NationsBanc Montgomery Securities Inc. analyst Al Tobia. Hambrecht & Quist analyst Farrokh Billimoria said 3Com cannot report earnings that are even with or above first-quarter levels and at the same time meaningfully reduce channel inventory levels this quarter. The analyst said he expects the company to report a sequential revenue and earnings decline for the second quarter ending in November, noting that he believes 3Com is focused on cutting modem as well as adapter-card inventories. CIBC Oppenheimer & Co. analyst Randall Yuen pointed out, however, that "no one knows for sure" what the company will do. "Some are hoping the company will just dump the entire November quarter so they can get the inventory issue out of the way," he said. "Some are saying it could take several quarters." "It's up to the company," Mr. Yuen said. Mr. Tobia earlier cut his second-quarter estimate on 3Com to 9 cents a share on revenue of $1.45 billion from 53 cents on revenue of $1.73 billion. He also reduced his full-year estimates to $1.44 a share from $2.40 for fiscal 1998 and $2.20 a share from $3.10 for fiscal 1999. And Mr. Billimoria lowered his second-quarter view to 38 cents a share on revenue of $1.55 billion from 52 cents on revenue of $1.72 billion. He cut his fiscal 1998 estimate to $1.74 a share from $2.29. Comparable year-ago results weren't available, since last year's numbers don't reflect 3Com's acquisition of U.S. Robotics. 3Com reported earnings of 48 cents a share on $1.6 billion in sales for the fiscal first quarter ended Aug. 31. These results exclude a $426 million pretax charge related to the company's acquisition of U.S. Robotics. Since Nov. 10, 20 of 34 analysts have lowered their estimates for the second quarter, with "the more recent revisions deeper than the earlier ones," said Chuck Hill, director of research at First Call. The mean estimate for the quarter has fallen to 44 cents a share from 53 cents as of the start of Nov. 10. Illustrating the drop even more dramatically, the estimate range has widened to between nine cents and 58 cents a share from between 47 cents and 58 cents on Nov. 10, Mr. Hill said. Since Nov. 10, Mr. Hill said, full-year estimates have also fallen, to $2.06 a share from $2.30 for fiscal 1998 and to $2.68 a share from $3.02 for fiscal 1999.

To: SHW who wrote (10606)	11/21/1997 10:37:00 AM
From: AreWeThereYet	Read Replies (1) \| Respond to of 45548

SHW, it is because all the institution already dumped most of their COMS holdings. Did you see how COMS fell from $45 to $28??? aC

To: SHW who wrote (10606)	11/21/1997 11:29:00 AM
From: craig crawford	Respond to of 45548

<< Craig, why all the downgrades and COMS was still up today? I knew Nasdaq & DJ are all up, but why COMS? Look at ASND, I hate to see another repeat, but is it possible COMS will drop below $25? >> Sure, I believe it's possible. I am betting on it. COMS has a lot of the same problems as Ascend. They are facing increasing competition in all areas of their business, they are trying to execute a huge merger, they have exposure to Asia, they have troubles with their products working properly etc. Looks like Ascend all over again. Every stock has their swan song. Ascend rallied from 38 to 49 before tanking to 22. SEG climbed one last time above 40 before slipping to the low 20's. WDC had a nice rally to over 50 just before they warned and hit the low 20's. COMS is experiencing it's "Swan Song" right now. One last rally that will fail.