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

To: Finder who wrote (14494)	3/18/1998 5:47:00 PM
From: Glenn D. Rudolph	Read Replies (2) \| Respond to of 45548

COMS: HAMBRECHT&QUIST decreased estimate for fiscal year ending 05/98 from $0.84 to $0.79 on 03/11/98 COMS: MORGAN KEEGAN has reiterated estimate for long term EPS growth of 30.00% per year on 02/27/98

To: Finder who wrote (14494)	3/19/1998 2:49:00 AM
From: Wigglesworth	Read Replies (1) \| Respond to of 45548

Rockwell Expects Lower Results As Modem-Chip Business Stumbles By FREDERICK ROSE Staff Reporter of THE WALL STREET JOURNAL COSTA MESA, Calif. -- Rockwell International Corp., stumbling in its modem-chip business, said it expects its fiscal second-quarter profit will be about 25% lower than the year-earlier figure. The comparable figure last year was 71 cents a share from continuing operations. That number reflects dilution according to current accounting standards. Because of the lower results in the quarter ending March 31 and an unexpectedly slow recovery from last year's bruising battle over standards for new high-speed modems, Rockwell said it expects profit for the year ending Sept. 30 to about equal the $2.89 a share from continuing operations reported for fiscal 1997. Rockwell's indicated results, which work out to about 53 cents a share for its second quarter, are substantially lower than the consensus projection by 12 analysts tracked by First Call of 74 cents a share in the fiscal second quarter and $3.18 a share for fiscal year 1998. Rockwell blamed "pricing pressures" in its modem operations for the decline. It said its lower quarterly result also will include a previously undisclosed $10 million pretax "restructuring charge" in its semiconductor-systems operations. Company officials declined to elaborate, but Rockwell has both development costs and patent litigation that may have prompted the accounting action. The company's unexpected announcement late Wednesday came after the close of markets. In New York Stock Exchange composite trading, Rockwell was up $1.125 to close at $60.50. Rockwell emphasized that the other principal parts of its business, its automation division and its avionics and communications operations "continue to perform strongly." Moreover, a company official said, lower results in the semiconductor systems operation are limited to its big computer modem-chip business. During 1996 and early 1997, Rockwell's semiconductor operation was hugely profitable as the company cranked up production of a mature product known as the V.34 modem chip. But, early in 1997, there was a sudden change when Rockwell and its principal competitor, U.S. Robotics Corp, now a unit of 3Com Corp., introduced new, incompatible modems that promised to operate almost twice as fast as the V.34 standard. Losses in this modem war were substantial and recovery has been far slower than expected. The battle itself has been resolved with the acceptance of a new, compatible V.90 standard late last month. But everyone from Internet-service providers, to modem makers and consumers have been slow to take up the new modems. Rockwell had expected to get over this hump. Don H. Davis, chairman, president and chief executive officer, said in November, when Rockwell reported its fiscal year-end results, that the company "expects stronger performance in the second half of the fiscal year 1998 as our major investments in Semiconductor Systems begin paying off." Wednesday, however, Mr. Davis changed the tune. "We are experiencing significant pricing pressure on the new V.90 product and, accordingly, our Semiconductor Systems will not recover in the second half of our fiscal year to the extent we previously anticipated," he said. People in the industry have noted that Rockwell, which sells its modem chips to companies that make modems, has seen a very slow response from those makers, as the market recovers from the earlier confusion and debate over standards.