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HolidayBuyer's Guide
Tech Industry

3Com flies past 1Q estimates

Network-equipment maker 3Com posted a smaller-than-expected loss in its first quarter Tuesday, losing $41.3 million, or 12 cents a share, on sales of $933.8 million.

First Call Corp. consensus expected 3Com to lose 33 cents a share in the quarter.

3Com (Nasdaq: COMS) shares closed off 6 cents to $13.94 ahead of the earnings report.

In the year-ago quarter, 3Com earned $113.7 million, or 32 cents a share, on sales of $1.2 billion.

The $933.8 million in sales included $127.5 million from the exited analog modem and LAN/WAN high-end chassis businesses.

Excluding those sales, 3Com recorded sales of $806.3 in the quarter, up 20 percent from the fourth quarter.

Considering 3Com is in the midst of changing its business to exit certain product lines and focus on high-growth markets and technologies, the strong first-quarter results should please its investors.

"The close of our first quarter marks the completion of our restructuring," said CEO Eric Benhamou in a prepared release. "The transformation milestones and business objectives set forth in March 2000 and reaffirmed last quarter were completed on or ahead of schedule."

In the quarter, 3Com's commercial consumer networks business posted sales of $631.9 million in the quarter, up 24 percent from the fourth quarter.

Its carrier networking business reported sales of $167.2 million, up 7 percent from the prior quarter.

Last quarter, 3Com posted a loss of $146.8 million, or 42 cents a share, on sales of $763.7 million.

Its shares rallied up to a 52-week high of $119.75 in March before falling to a low of $12.50 in July.

Ten of the 20 analysts following the stock rate it either a "buy" or "strong buy" while the other 10 call it a "hold."