3Com lowers guidance as demand continues to fall

A continuing slide in demand, particularly in the North American market, has forced 3Com Corp to lower its guidance for its third quarter to February 28. The Santa Clara, California-based company said it now expects revenue to be in the range of $240m to $245m, way down on the $275m expected by analysts, and 22.7% down on the $355.9m achieved a year earlier.

3Com said that enterprise networking sales are expected to show a 13% to 14% fall on the previous quarter, largely due to slow demand in North America. The fall is even more dramatic in connectivity, where sales are likely to show a sequential fall of more than the 20% originally expected.

The company’s decision to sell its CommWorks carrier-focused network hardware business to UTStarcom Inc for $100m cash appears vindicated by the news that Commworks sales are likely to fall by 7%, compared with its previous guidance that they will be flat sequentially.

Given the length of the present slump, it is alarming that 3Com’s figures show that the decline is not bottoming out. The company’s shares slipped 11.1% to $4 on the news, valuing the company at $1.4bn.

Source: Computerwire

Sign up for our weekly news round-up!

Sign up to the newsletter: In Brief

Sign up for our regular news round-up!

Sign up for our weekly news round-up!

Sign up to the newsletter: In Brief

I would also like to subscribe to:

Thank you for subscribing