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

To: EAGLE-EYE who wrote (11245)	12/2/1997 10:14:00 PM
From: vegetarian	Read Replies (1) \| Respond to of 45548

>>Is 30 the floor? It does not look like the floor, but it is an immediate support level, some support around 28 and then it may get ugly. What level we see tomorrow depends on how hard the sell off is, but if the analysts were aware of the problems they may have already been getting their clients out.

To: EAGLE-EYE who wrote (11245)	12/2/1997 10:15:00 PM
From: Marcel	Respond to of 45548

Unsold modems plunge 3Com into big losses By Kourosh Karimhany Tuesday December 2 7:13 PM EST PALO ALTO, Calif. (Reuters) - Unsold modems stuffed throughout the retailing channel led to a big loss for networking giant 3Com Corp. Tuesday. The company's stock sank in after-hours trading after it said its second-quarter financial results will be far less than what Wall Street expects. It said it plans to slash inventories of unsold networking products sitting with its distributors to deal with the problem. Fewer consumers have been buying modems from 3Com's U.S. Robotics unit because of confusion over an industry-wide marketing war over modem standards. The second-biggest maker of computer networking gear, 3Com also said weakening Asian economies and weak modem sales could hamper its results for several more quarters. 3Com, based in Santa Clara, Calif., will report only a "slight" profit for the quarter ended Nov. 30 on revenue of between $1.22 billion and $1.24 billion. Wall Street had expected 3Com to earn a relatively strong 44 cents a share, according to a recent analyst survey by Zacks Investment Research. In the past few months, 3Com has been selling more products to its distributors and middlemen than they were able to sell to customers. 3Com slashed shipments to its distributors in the second quarter and will now take a hit to sales to deal with the problem "rapidly and decisively," said Eric Benhamou, 3Com chief executive. Even so, it could take at least two more quarters for 3Com to deal with its problems, analysts said. "They've got about another $210 million of unsold inventory" to sell off, which could take at least one more quarter, said Farrokh Billimoria, analyst at Hambrecht & Quist. Furthermore, networking companies are set to iron out technical differences over modem technology in January. If they do manage to settle the differences, it will not be soon enough to help 3Com in the third quarter. The third and fourth quarters will not be as weak as the second quarter, "but they will certainly be weak," Billimoria said. 3Com gave its forecast after the market closed. The shares traded as low as $30.625 in after-hour trading, a 14 percent decline. The stock closed down $3.063 at $35.313 for the day. 3Com was the third computer company Tuesday to warn of weaker-than-expected earnings for the quarter, raising concerns that the technology industry will be hit hard by Asia's economic troubles. Disk drive make Western Digital Corp. lowered its earnings forecast for the second time in a month on lower sales of its products. Custom computer chip maker Altera Corp. also said inventory adjustments by its customers will lead to weaker-than-expected sales for the quarter. The Nasdaq composite, which includes many of the biggest technology stocks, fell 24.35 points, or 1.5 percent, to 1606.37 on Tuesday. (Reuters/Wired)