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

To: Beachbumm who wrote (12541)	12/19/1997 1:10:00 PM
From: Mang Cheng	Respond to of 45548

Some info. from conf. call from wsj last night, to sum up "no news is good news for coms now" : **************************************************************** Dow Jones Newswires -- December 18, 1997 As Predicted, 3Com Cut Channel Inventories In 2Q By Joelle Tessler and Mark Boslet NEW YORK (Dow Jones)--3Com Corp. (COMS) took a sharp slice out of channel inventories in its second quarter, just as it said it would, but finished goods inventories at the company rose. The networking products company also warned that third quarter gross margins could come under pressure as it cuts production to continue planned inventory reductions. On a conference call with analysts and press, however, Eric Benhamou, 3Com chairman and chief executive, said he is comfortable with projections that industry-wide growth in 1998 will be 5% to 6% above 1997 levels. These research outlooks have been accurate in the past, he said. Yet he also noted that even this higher level of growth will not match the more robust levels seen in the early and mid-1990s. Overall, 3Com's results were in line with the lower operating results that the company predicted in early December. The company warned analysts at that time that it would miss earlier earnings estimates in order to reduce high channel inventories of modems, network access cards and systems products. 3Com inherited the high modem channel inventories as part of its acquisition of U.S. Robotics. 3Com posted earnings of 4 cents a share on sales of $1.2 billion for its fiscal second quarter, ended Nov. 30, compared with 33 cents on sales of $1.4 billion a year earlier. The year-ago earnings include charges. First Call had put the consensus estimate for the latest quarter at 4 cents a share. 3Com's Benhamou said Southeast Asia proved a weak spot in the quarter and that Korean sales may have even worsened since the company's Dec. 2 earnings pre-release. For the quarter, the company's gross margins came in at 46.6%, down from 48% in the first quarter. And Chief Financial Office Christopher Paisley said third quarter margins may come under additional pressure as 3Com reduces its production volume. Also in the conference call, the company said in-house inventories rose by more than $200 million because 3Com had earlier in the period expected higher shipments. Lazard Freres analyst Michael Duran noted that the conference call produced few surprises - and no new news about the company's channel inventories since the announcement at the start of the month. Adding that this is a good sign for 3Com, Duran said that the company's inventory problem appears to be correcting itself since "it's three weeks into the quarter and they're saying the same thing." "It's comforting not to have surprises ... because it has been so rocky lately," he said. To subscribe : interactive.wsj.com