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

To: joe who wrote (22184)	9/23/1998 10:14:00 PM
From: Wigglesworth	Read Replies (2) \| Respond to of 45548

Earnings Views On 3Com Climb Following Solid 1Q Report By JOELLE TESSLER Dow Jones Newswires NEW YORK -- Analysts are raising estimates on 3Com Corp. (COMS) after the data networking company's first-quarter revenue growth came in on the high end of its projections. Sequential revenue growth of 2.2% in 3Com's first quarter ended Aug. 28, combined with a 130-basis-point sequential increase in gross margins, has led many analysts to cautiously conclude that 3Com has finally worked through the bloated inventories in its distribution channels and sluggish 56K-modem sales that plagued the company earlier this year. "There is a pretty strong indication that performance will be strong for the next couple of quarters," said Sanford C. Bernstein & Co. analyst Paul Sagawa. According to First Call Corp., the consensus estimate on 3Com for fiscal 1999, which ends in May, has gone up to $1.33 a share based on numbers from 14 analysts, from $1.29 a share based on numbers from 29 analysts. The company earned 67 cents a share in fiscal 1998. 3Com late Tuesday reported operating earnings of 24 cents a share on revenue of $1.406 billion for its first quarter, ended August, up from a loss of 15 cents a share on revenue of $1.598 billion a year earlier. The earnings were 4 cents above the consensus estimate. Revenue - which the company had projected would be relatively flat on a sequential basis - rose from the fourth quarter level of $1.375 billion. Systems products revenue rose 1.8%, while client-access products revenue rose 2.5%. Lazard Freres & Co. analyst Michael Duran noted that 3Com was able to grow revenue even though its first quarter is a seasonally slow one for the company - particularly since it has a heavy presence in Europe, which tends to shut down in summer - and even in the face of difficult economic conditions in many parts of the world. "This gives everyone the idea that revenue will be up strongly in the next quarter," said Duran, who projects second-quarter revenue will rise 7% from the first quarter. 3Com told analysts that the networking markets in which it operates are growing at a rate in the mid-teens year-over-year, and that the company hopes to gain market share and therefore grow faster than the overall market. 3Com expanded its gross margins to 43.5% in the first quarter from 44.8% in the fourth quarter, partly because of improved manufacturing efficiency. The company has ramped up operations, Duran explained, after slowing production earlier in the year to reduce bloated inventories in distribution channels. 3Com indicated it is moving back toward its long-term business model of gross margins in the 45.5% to 47.5% range. Duran noted that 3Com is also bringing down its operating expenses as a percent of revenue by holding expenses flat on an absolute basis while it grows revenue - a trend that should accelerate in the second quarter. Long term, he said, the company is targeting expenses as a percent of revenue at 27.5% to 29.5%, which would translate into operating margins of 16% to 20%. Operating margins were 8.4% in the first quarter. SG Cowen Securities Corp. analyst Chris Stix believes operating margins could be around 13.5% by the end of fiscal 1999 and 15.5% by the end of fiscal year 2000. 3Com's shares were recently down 3/4, or 2.3%, at 31 5/8 on Nasdaq volume of 17 million compared with average daily volume of 7.9 million. -Joelle Tessler; 201-938-5285; joelle.tessler@cor.dowjones.com --------------------------------------------------------------------------------

To: joe who wrote (22184)	9/23/1998 10:25:00 PM
From: Wayners	Read Replies (2) \| Respond to of 45548

Hi Joe, In order to figure out what price to sell at on a gap up you need a real time quote service that gives updated bid/ask quotes from about 8:20 a.m. up until the open. You can then gauge where its going to open and watch the bids rise up gradually over time up to the open. Seeing this helps develop an exit strategy in your mind if you are into trying to collect gap ups. Sometimes I sell immediately other times I wait 10, 15 or 30 minutes. It all depends on what I see.