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

To: Road Walker who wrote (11116)	12/2/1997 4:36:00 PM
From: Mike 2.0	Respond to of 45548

Whoa mama...Briefing blurb follows: "3Com Corp (COMS) 35 5/16 -3 1/16: networking equipment maker says it expects to report a slight profit for the 2nd qtr, which would fall sharply below the $0.44 a share expected by Wall Street analysts. Sites change in inventory management for expected disappointment. Puts Q2 sales at $1.22 bln to $1.24 bln. Stock currently halted..." To me, 'slight profit' sounds like a wee bit over breakeven, or IMO probably not even .09 which AFAIK was Bear Stearns lowball estimate. OY!

To: Road Walker who wrote (11116)	12/2/1997 4:36:00 PM
From: Roader	Read Replies (1) \| Respond to of 45548

3Com Reduces Channel Inventories; Revises Inventory Practices Worldwide Business Wire via Dow Jones SANTA CLARA, Calif.--(BUSINESS WIRE)--Dec. 2, 1997--3Com Corp. (NASDAQ:COMS), today announced that it has reduced inventory levels at its channel partners and revised its inventory practices across partners, business units and geographies worldwide to help increase predictability and linearity of sales as well as simplify the administration of inventory in global channels. Discussions with key partners, customers and investors indicated that all stakeholders would be better served with a new, more economical inventory business model that allows the company to achieve consistently broad market coverage with lower levels of product inventory in the channel. The new model is also designed to be more responsive to technology transitions and rapidly changing business conditions. A comparison of the old and new model has been included at the end of this release. Because 3Com decided to converge on the new inventory management model quickly, second quarter sales are now expected to be between $1.22 billion and $1.24 billion for the second quarter of fiscal 1998 which ended November 30. Sales in this range are expected to result in a slight profit for the quarter. More complete and reliable data and management tools than were previously available indicate that global channel inventories have been reduced on average from three to five weeks, depending on product categories, by the end of the second quarter. However, the new model necessitates planning for further modest inventory reductions in the company's modem and systems businesses during the third fiscal quarter. Achieving these planned reductions would complete the convergence to the new inventory model and ensure alignment with channel partners. Complete second quarter results will be reported on or about December 18. "As more and more networking products reach end users through networking partners, responsive inventory management is becoming a key competitive differentiator for both the networking channels and their vendors," said Eric Benhamou, 3Com's chairman and chief executive officer. "3Com's long history of global channel leadership allows us to optimize the process by which we supply our partners with the right products at the right time and increase the competitiveness of both 3Com and our channels." Additionally, a new EDI-based (Electronic Data Interchange) inventory control system that leverages Internet and web technologies will allow 3Com and its worldwide channel partners to closely monitor inventory levels. These processes, which will provide detailed analyses of 3Com sales to channels and channel sales to end users at the company's top 60-70 global partners will be implemented worldwide over the next several quarters. The information in this release regarding expected second quarter results is forward-looking and preliminary. Actual final results for the quarter could differ, depending on the following factors: accounting adjustments made during the course of closing the quarter and the roll-up of actual financial data from the company's various business units and geographies worldwide. The information regarding expected inventory levels during the third quarter is also forward-looking. Actual levels could differ, depending principally on sell-through rates from the company's various channel partners during the third quarter. For a more detailed discussion of these and other risk factors, interested parties should review the company's SEC reports, including 3Com's Form 10-K for the year ended May 31, 1997 and 10-Q for the quarter ended August 31, 1997, and U.S. Robotics Form 10-Q for the quarter ended March 30, 1997. 3Com Corp. enables individuals and organizations worldwide to communicate and share information and resources at anytime from anywhere. As one of the world's preeminent suppliers of data, voice and video communications technology, 3Com has delivered networking solutions to more than 100 million customers worldwide. With global reach and local touch, the company provides enterprises, network service providers and carriers, small businesses and consumers with comprehensive, innovative information access products and system solutions for building intelligent, reliable and high performance local and wide area networks. For further information, visit 3Com's World Wide Web site at 3com.com, or the press site at 3com.com . 3Com's Channel Inventory Models for Key Products Desirable On-Hand Channel Inventory (measured in weeks of supply) ---------------------------------------------------------------- Major Product Line Old Model New Model ---------------------------------------------------------------- NICs 6-10 4-6 ---------------------------------------------------------------- Modems 8-12 6-8 ---------------------------------------------------------------- Systems 8-12 5-7 ---------------------------------------------------------------- Note to Editors: 3Com is a registered trademark of 3Com Corp. CONTACT: 3Com Corp. Shirley Stacy, 408/764-6301 (IR) Shirley_Stacy@3Com.com Bob Ingols, 408/764-8002 (PR) Bob_Ingols@3Com.com Donna Stein, 408/764-5960 (Analyst Relations) Donna_Stein@3Com.com