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

To: craig crawford who wrote (22051)	9/23/1998 2:06:00 AM
From: joe	Respond to of 45548

Here's the TSC view: Despite a sharp revenue falloff, 3Com (COMS:Nasdaq) walloped Wall Street estimates by a healthy margin. The computer network equipment maker reported Tuesday evening net income of $86.7 million (excluding a one-time $10.2 million pretax gain), or 24 cents per share, in the August fiscal quarter, topping First Call's estimate by 4 pennies. Due to a restructuring, one year earlier 3Com had posted a loss of $51.2 million, or 15 cents a share. The positive earnings surprise came primarily through cost cutting. The company's sales topped $1.4 billion for the quarter, 12.5% below same-quarter last-year revenues of nearly $1.6 billion. Although company executives can take some joy in the fact that 3Com eked out a 2% gain in revenues from the previous quarter, certain bookkeeping changes may have helped to improve earnings per share -- namely, a lower tax rate and a smaller pool of shares outstanding. 3Com lowered its tax rate to 32% down from 35% the prior quarter. Executives said they helped limit the tax bill by extending their offshore manufacturing facilities. CEO Eric Benhamou said this should not have been a surprise to Wall Street. One buy-side analyst agreed that the company had been predicting a decrease of some sort for some time. 3Com also shrunk the number of diluted shares outstanding by 1.7 million shares to 366.4 million shares from the prior quarter as it bought back shares on the market. Benhamou said the company has swept its old excess-inventory problems into the past. Other executives noted promising sales of its new products.