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 : COMS & the Ghost of USRX w/ other STUFF -- Ignore unavailable to you. Want to Upgrade?

To: Finder who wrote (16411)	6/25/1998 12:42:00 AM
From: WebDrone	Respond to of 22053

Finder- this article? <June 25, 1998 3Com Tops Analysts' Estimates For 4th Quarter; Problems Persist By LEE GOMES Staff Reporter of THE WALL STREET JOURNAL 3Com Corp. slightly topped analysts' diminished expectations for fourth-quarter profit, though the results provided evidence of the continued long-term problems facing the supplier of computer-networking gear. For the period ended May 31, net income at the Santa Clara, Calif., company was $63.6 million, or 17 cents a diluted share, up 52% from the $41.7 million, or 12 cents a diluted share, a year earlier. Excluding a series of one-time special charges and credits, net on operations was $65.9 million, or 18 cents a diluted share, a penny higher than the First Call consensus for the company. Sales were $1.37 billion, flat from a year before. Rebound Is Claimed 3Com said the results proved it is rebounding from troubles that befell it following its acquisition last year of U.S. Robotics. After that deal, 3Com found itself confronted with a long list of inventory and related problems that slowed momentum and led to a series of disappointing quarters. Those results hammered the company's stock, which was above $80 late in 1996 but more recently has traded below $25. "We have turned the corner and have begun to realize operating efficiencies and improved financial results," said Eric Benhamou, the company's chairman and chief executive officer. He added that the company has "entered fiscal 1999 with confidence and a solid foundation for future growth and continued sales." The company released its earnings after stock markets closed. Its shares closed in Nasdaq Stock Market trading at $27.125, up $1.125. After the announcements, the stock rose in after-market trading to $29.50 a share, according to Instinet Inc. Big Strategic Challenge 3Com's flat revenue is an indication of one of its biggest strategic challenges. By contrast, sales at Cisco Systems Inc., the networking-industry leader, have continued to grow at rates well above 20%. Cisco's surge is leaving suppliers such as 3Com further and further behind, even as the networking industry gears up for a new round of growth selling a new breed of equipment that serve both the voice and data markets. 3Com's fourth-quarter sales are also lower than the roughly $1.4 billion the company had hoped to achieve at the start of the period. Midway through the quarter, though, management signaled analysts that revenue would be lower, in part because of declining prices for the company's personal-computer modems. As a result, most analysts in recent weeks had cut their numbers for the company. The networking industry is in a period of rapid consolidation, and there has been speculation that 3Com might itself be an acquisition target. That talk increased following the $7.7 billion purchase earlier this month of Bay Networks Inc. by Northern Telecom Ltd. But some analysts say that 3Com may not be that attractive a buyout candidate, because a large percentage of its product line is low-profit modems and network-connector cards. Mr. Benhamou, though, has steered 3Com through rough waters before, and few analysts count him out. During the quarter, 3Com began looking for a chief operating officer to run its day-to-day business, relieving Mr. Benhamou to spend full-time on larger strategic issues.> Dang it, I guess the whole world should have just bought CSCO instead. Grrr, what a genius, this guy. R.