3Com Corp delivered the poor second-quarter results they promised two weeks ago (CI No 3,303), posting net income that plummeted 87% year-over-year to $15.1m on revenue that fell 14.2% to $1.22bn. Earnings per share came in at $0.04, matching First Call’s revised consensus. 3Com had said that its second quarter numbers would be hit hard by its ongoing efforts to reduce channel inventories worldwide. The networking giant also hinted that the effects will continue into the third quarter, as it further reduces inventories, mostly within the structure of the US Robotics operations acquired earlier this year (CI No 3,110). First Call is expecting earning of $0.19 per share for the third quarter. In the second quarter, sales of systems products – including switches, hubs, internetworking and remote access products – were $621.5m, or 51% of total sales. Client access products – network interface cards, modems, etc – stood at $598.8m, or 49%. For the six month period, the company reported a net loss of $131.7m on revenue up 5.6% at $2.82bn. The company’s balance sheet shows cash and cash equivalents of $1.14bn, current assets of $3.1bn and current liabilities of $1.32bn. The quarterly report came only a day after 3Com admitted that another class action suit – in addition to one filed earlier this month (CI No 3,305) – has been filed against the company. 3Com shares have shed about 35% of their value since mid-October.
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