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

To: craig crawford who wrote (27501)	2/3/1999 3:22:00 PM
From: Finder	Read Replies (1) \| Respond to of 45548

I invite you to call investor relations yourself and see what impression you get.

To: craig crawford who wrote (27501)	2/3/1999 3:45:00 PM
From: Moonray	Respond to of 45548

More: 3Com Falls on Concern It's Losing Corporate Business (Update1) (Adds details in 3rd to 12th paragraphs; updates share prices.) Santa Clara, California, Feb. 3 (Bloomberg) -- Shares of 3Com Corp., the No. 2 network-equipment maker, fell as much as 16 percent on concern that the company may be losing corporate sales to Cisco Systems Inc. while prices on other 3Com products fall. 3Com dropped 6 13/16 to 37 5/16 in late trading of 32.4 million, making it the most active stock in U.S. markets. Earlier the shares fell to 37 1/16, their lowest since November. 3Com gets equal revenue from big corporate systems and the smaller cards and modems that link those systems into networks. Prices on some cards have dropped 15 percent since November, analysts said, while No. 1 networking company Cisco is making inroads with 3Com's small and midsize business customers. ''It's a combination of factors that's hurting (3Com),'' said Craig Johnson, principal analyst with market research firm Pita Group in Portland, Oregon. Cisco's Growth Cisco, the No. 1 networking company, said yesterday that sales to businesses rose 30 percent in the fiscal second quarter ended in January. It also said it expects sales made through distributors to more than double this year. That led some analysts to conclude that Cisco is taking market share from Santa Clara, California-based 3Com, which gets most of its revenue from corporate sales made through distributors such as Tech Data Corp. ''Cisco had growth in small and medium-sized businesses, which is 3Com's market,'' said Michael Duran, an analyst at Lazard Freres & Co., who rates 3Com ''buy.'' Adding to the worry about 3Com, maker of the PalmPilot hand-held computer, is concern that prices on its modems and so-called computer connector cards may be falling. Those products, used to link computers to corporate networks and the Internet, contributed about half of 3Com's $1.54 billion in revenue for the quarter ended in November. Prices on several 3Com adapter card models are down 15 percent from November prices, according to a report by analyst Stephen Koffler of Donaldson, Lufkin & Jenrette Securities. Koffler, who rates 3Com ''buy,'' cut his earnings estimate for 3Com's fiscal third quarter ending in February to 34 cents from 36 cents. Modem Prices Another analyst said 3Com's modem prices also face increased pressure. ''Prices in those businesses (modems and adapter cards) are at risk,'' said Martin Pyykkonen, an analyst at CIBC Oppenheimer, who rates 3Com ''hold.'' Pykkonen also expects 3Com to earn 34 cents in its third quarter ending this month, less than the average estimate of 36 cents, based on a poll of analysts by First Call Corp. Also yesterday, No. 2 computer distributor Tech Data Corp. said its earnings will lag forecasts for the fiscal year as it slashes prices to keep pace with rivals' price cuts. 3Com sells ''a lot of product'' through Tech Data, Pyykkonen said. 3Com officials didn't immediately return a phone call. Cisco told analysts on a conference call yesterday that corporate sales may slow in 1999 as companies wait to update their networks until they assess the impact of the Year 2000 computer bug. The bug, which prevents software from distinguishing between 1900 and 2000, may cause some older computers to crash on Jan. 1. Shares of Cisco fell 1 13/64 to 111 3/16 o~~~ O