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

To: jhild who wrote (15272)	4/23/1998 12:55:00 AM
From: Mang Cheng	Read Replies (1) \| Respond to of 45548

A pretty meaningless article from Forbes : "Bigger ain't always better LAST FALL ANALYSTS were praising 3Com Corp.'s massive $8.5 billion acquisition of U.S. Robotics. FORBES thought the deal was too expensive. We figured that the combined company would be focused on too much low-margin networking gear (Nov. 3, 1997). The game's not over-but March's ugly third-quarter results were not auspicious. Revenues were down more than $200 million from the pro forma results the two companies posted a year ago, before the merger. Worse, 3Com's operating expenses were up 38%. Don't blame the networking business. Industry leader Cisco Systems, Inc. released solid second-quarter numbers a month earlier, with net income up 30%. Cisco is on pace to do $8 billion in sales this year, while 3Com will be lucky to hit $6 billion. The difference? Cisco has kept its focus on higher-priced, high-margin sectors of the networking business like routers and switches. 3Com is going for commodity products like network interface cards and modems. Would 3Com do better to go after Cisco's market? "You have to pick battles where you can win," says 3Com Chief Executive Eric Benhamou. -JEFFREY YOUNG forbes.com Mang