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3Com gains on takeover rumors

Shares of 3Com Corp. (Nasdaq: COMS) moved up 2 1/4, or 8 percent, to 28 13/16 Friday after Business Week's "Inside Wall Street" column reported that it might be a takeover target for either Lucent Technologies or Ericsson AB.

3Com shares have fallen off Wall Street's radar screen of late after it preannounced disappointing earnings in its third quarter.

The stock hit a 52-week high of 51 1/8 in December before tumbling to a low of 20 in April.

3Com did manage to meet Street's reduced estimates in the quarter, earning $89.6 million, or 24 cents a share, on sales of $1.41 billion.

Lucent Technologies (NYSE: LU) shares were off 2 1/4 to 58 3/4 while Ericsson AB (Nasdaq: ERICY) fell 1 to 27 1/16.

3Com officials weren't immediately available to comment on the rumors.

First Call consensus expects the network-equipment maker to earn 23 cents a share in its fourth quarter and $1.07 a share in the fiscal year.

In its latest quarter, 3Com sold fewer of its low-cost modems and connector cards used to link personal computers to corporate networks and the Internet. The products contribute about half of 3Com's total sales, and analysts expect 3Com to cut prices even further to spur sales.

Sixteen of the 33 analysts following the stock rate it a "hold.">