3Com reports record
Fourth Quarter
Revenues, in line with Estimates
by Jeff Fischer
(TMF Jeff)
ALEXANDRIA, VA, (June 24, 1997)/FOOLWIRE/ -- After the market closed
3Com Corporation <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: COMS)") else Response.Write("(Nasdaq: COMS)") end if %> announced record revenues for the fourth
quarter and fiscal year ended May 31, 1997.
Sales increased 26% from the fourth quarter of fiscal 1996, to $829.9 million.
Net income for the quarter was $89.2 million -- or $0.48 per share -- which
was in line with estimates. Year-ago net income had included a pre-tax charge
of $53.3 million, or $0.30 per share. Excluding the non-recurring items,
net income increased 8% from $82.5 million, or $0.46 per share, posted in
the same quarter last year.
Importantly, 3Com saw higher-end product sales increase significantly from
the year before.
Sales of such products -- including switches, hubs, internetworking, and
remote access products were $473.0 million -- an increase of 20% compared
to the same quarter a year ago. Sales of the arguably "commodity-like" network
adapters increased 35% from the year-ago period, to $349.6 million. 3Com's
adapters are said to be the best in the industry, though recent price cuts
makes Intel a competitive threat in the eyes of many. 3Com cut prices to
match Intel.
Sales for the year were a record $3.1 billion, up 35% from $2.3 billion in
fiscal 1996. Net income was $374.0 million, or $2.01 per share. Excluding
non-recurring items in both years, net income for fiscal 1997 increased 36%
to $380.6 million, or $2.05 per share. Earnings for the year, despite the
flat last two quarters, grew over 20%.
During the quarter 3Com announced a number of new products, including the
industry's first end-to-end Gigabit Ethernet system, the SuperStack II Hub
100, OfficeConnect remote access products, and TranscendWare software modules
for virtual LANs, and more.
Written of in the Fool Port, in June, 3Com introduced the Fast EtherLink
XL CardBus PC Card, the world's fastest network PC Card -- performing up
to 31% faster than its competitors while requiring less than half the power.
About the quarter and year, 3Com stated, "Our fourth quarter caps another
year of growth in 3Com's revenues, earnings, market share and competitive
stature... This is an exciting period for 3Com. In addition to posting record
sales for the quarter, we have made many of the decisions necessary to expedite
the integration of 3Com and U.S. Robotics. We have transitioned to a new
organization and completed the business plan for the new company. Shortly,
customers and shareholders will begin to see the benefits of our broader
product line, stronger distribution channels, and increased market coverage.''
On June 12th, 3Com and U.S. Robotics <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: USRX)") else Response.Write("(Nasdaq: USRX)") end if %> announced the completion
of the merger of the two companies, which was first announced in February.
The transaction is the largest merger in the history of networking. 3Com
will report results of the combined companies beginning in the first quarter
of fiscal 1998, ending August 31, 1997.
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