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 : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Sowbug who wrote (30232)	1/13/1998 7:29:00 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 61433

ÿ 3Com Squeezed By Asia And Price Cuts(01/13/98; 3:46 p.m. EST)By Gabrielle Jonas, TechInvestor In a filing with the Securities and Exchange Commission Tuesday, 3Com said it will soon feel the squeeze from Asia's financial crisis and from cut-throat price competition in the 56-kilobit-per-second modem market. 3Com said Asian customers could default on money owed and competition threatened to put a dent in its market share.The Santa Clara, Calif., company said the already volatile modem industry -- characterized by vigorous competition, consolidations, upstarts, and uncertainty over adoption of industry standards -- is being aggravated all the more by weakness in Asia."The recent instability in the Asian financial markets appears to have negatively impacted sales, and may continue to negatively impact sales in those markets in a number of ways," 3Com said in its filing. "There can be no assurances that the company's results in any particular quarter will fall within market researchers' forecasted ranges."Consensus estimates for 3Com for the third quarter ending in February are 14 cents a share. Last quarter, ended Nov., 1997, 3Com met expectations of 4 cents a share.Dolefully, 3Com enumerated the ways Asia's problems could hurt the company, including increasing competition from local competitors which could leverage local currencies to offer sales, the drying up of pools of capital customers need to make purchases, and the slowing of end-user purchases.3Com warned that "a significant fluctuation in foreign currency could have an adverse impact on the company," and that instability in the Far East may increase credit risks as weakening Asian currencies lead to late payments or bankruptcies."Depending on the situation in Asia in coming quarters, any or all of these factors could adversely impact the company's financial results in future quarters," 3Com said.However, 3Com has no intention of abandoning its Asian customers, but may have to increase its exposure to the local currencies to compete. "Should the Asian economic environment fail to improve," 3Com said, "the company would consider continuing to expand its exposure to foreign currencies to preserve long-term customer relationships."Just as the Asian crisis is a concern, fierce competition could hurt 3Com, as well. "As new competitors enter the market and offer competing products, pricing may be affected," 3Com said. "The company believes there is a risk of downward pricing pressure on the company's products, including products incorporating 56-Kbps modem technology. Pricing pressure intensified across a variety of the company's products during the second quarter of fiscal 1998, and may intensify in coming quarters." 3Com [COMS] traded in the $70 range last year before falling. In late-afternoon trading on Tuesday, shares of 3Com were up 2 3/8 to 31 3/4, a rise of 8 percent. Stock Lookup ÿÿÿ Search Archives ÿÿÿ