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3Com's First-Quarter Profit Falls 49%

September 23, 1998|Bloomberg News

3Com Corp.'s fiscal first-quarter profit fell 49%, as the No. 2 networking company was hurt by price cuts on modems and other low-cost equipment that links computers to the Internet. Profit before a gain in the quarter ended Aug. 28 fell to $86.7 million, or 24 cents a diluted share, from profit before a charge of $169.6 million, or 47 cents, in the year-earlier period. 3Com was expected to earn 20 cents a share, according to a survey of analysts by First Call Corp. The company, which has seen profit slide in three of the last four quarters, cut prices on its telephone-based modems in June to boost demand amid a delay in a technology standard. 3Com also faces fierce competition from No. 1 networking-equipment maker Cisco Systems Inc., which leads the market for high-priced gear sold to large companies and Internet service providers. Santa Clara-based 3Com's sales fell 12% to $1.41 billion from $1.60 billion a year ago. 3Com shares rose 31 cents to close at $32.38 on Nasdaq. The company reported results after the close of trading.

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