|
3Com beats Street
|
 |
September 26, 2000: 4:38 p.m. ET
Networking company reports narrower-than-expected 1Q loss
|
NEW YORK (CNNfn) - Networking company 3Com Corp. on Tuesday reported a fiscal first-quarter operating loss that beat Wall Street expectations, reflecting actions taken in recent months to exit certain product lines and sharpen its focus on high-growth markets.
3Com (COMS: Research, Estimates), a leading maker of hardware that lets computers communicate with each other across networks, reported a pro forma net loss, which excludes special items, of $41.3 million, or 12 cents per share, for the quarter, compared with a profit of $113 million, or 32 cents a share, in the first quarter of fiscal 2000.
 Analysts surveyed by First Call had expected the Santa Clara, Calif.-based company to report a loss of 33 cents a share.
Total sales in the quarter were $933.8 million, down 22 percent from $1.2 billion in the same period one year ago, the company said.
The company said the results were better than its prior projected pro forma net loss of $67.5 million to $90.0 million or 19-to-25 cents a share. It had predicted first quarter revenues of about $775 million to $825 million.
On a press conference call, Eric Benhamou, 3Com chairman and CEO, attributed the encouraging results to a conservative outlook as it restructured the company, more efficient management of its inventory, and growth of its high speed and broadband businesses.
"We are very pleased that our quarter turned out better than we had anticipated," he said. "We have now completed our business transformation announced last March... and market demand is robust for our technologies."
Last March, 3Com restructured to focus its operations on broadband and wireless technology, such as home networking, high-speed modems and wireless and Internet telephony.
Key to the restructuring was the company's exit of several product lines, including analog modems, LANs (local area networks), and WAN (wide area networks). LANs connect computers and servers within one office or building, while WANs connect computers and servers in more than one location.
3Com also completed an initial public offering of stock in its Palm handheld devices unit, which controls about 70 percent of the market for "personal companion" electronic devices.
In addition it has cut more than 1,000 jobs, and transferred many others to affiliate companies.
The report was released after the close of Tuesday's regular trading day. In that session, 3Com shares closed down 6 cents at $13.94 on Nasdaq. In after-hours trade, the stock rose $1.62, or about 11 percent, to $15.56. 
|
|
|
|
|
 |
|
