3Com shares climb after beating forecast
The networking equipment maker's shares climb 22 percent after the company reports fiscal first-quarter sales that beat forecasts and a narrower-than-expected loss.
The shares closed today at $17, up 22 percent, on the Nasdaq Stock Market. Yesterday they closed at $13.94.
As previously reported, 3Com's sales of $933.8 million fell 23 percent from a year earlier, though they exceeded a forecast of $775 million to $825 million given by the company three months ago. The company, which spun off No. 1 electronic-organizer maker Palm in July, benefited from increasing sales of products such as cable modems, which 3Com hopes will help it return to profitability.
"This will give investors a lot more confidence that they really can deliver on their promise of achieving profitability by the end of the fiscal year," said Sanford C. Bernstein analyst Paul Sagawa, who rates 3Com shares "outperform."
3Com's loss from continuing operations in the period ended Sept. 1 was $63.7 million, or 18 cents a share, compared with year-ago income from continuing operations of $128.3 million, or 36 cents.
Excluding acquisition and reorganization costs and investment gains, 3Com said its loss was $41.3 million, or 12 cents a share, narrower than the 33-cent average estimate of analysts polled by First Call/Thomson Financial.
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