3Com Posts Strong Quarter, Unveils Modem - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


3Com Posts Strong Quarter, Unveils Modem

3Com Corp. yesterday reported a 38% increase in net income for its fiscal fourth quarter ended May 28, as the company's business shifted away from low-margin sales of modems and network interface cards.

The company reported fourth-quarter net income of $87.5 million, or 24 cents per share, compared with $63.57 million, or 17 cents per share, in last year's fourth quarter.

3Com's revenue rose 3% during the quarter to $1.42 billion, from $1.38 billion in the same period last year. While the company's sales of switches, hubs, routers, and network-management software rose 17% from the year-ago quarter, its sales of modems and network interface cards plunged 10%.

The shift in 3Com's sales mix was bad for revenue growth, but it caused the company's gross margins to improve to 46.9% of sales in the quarter from 43.5% of sales in the same period last year. Sales of modems and network interface cards, which generally carry lower profit margins than 3Com's routers, switches, and hubs, accounted for 45% of the company's sales in the fourth quarter, down from 51% in the same period last year.

For the full year, 3Com's sales rose 7.4% to $5.8 billion, from $5.4 billion in fiscal 1998. Net income was $403.9 million, or $1.09 per share, compared with $30.2 million, or 8 cents per share, in fiscal 1998. The company's fiscal 1998 results included a net charge of $253.7 million, primarily related to its merger with modem maker U.S. Robotics.

Separately, 3Com yesterday said it plans to release next month its Megahertz 56K Global modem, which connects to cellular networks such as the Global System for Mobile Communications system.

The modem includes country-selection software that simplifies remotely connecting to business networks and the Internet from overseas. The unit supports Windows 95, 98, 2000, and NT 4.0, as well as Mac OS, Linux, and DOS. It's expected to be priced at $229.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
2020 State of DevOps Report
2020 State of DevOps Report
Download this report today to learn more about the key tools and technologies being utilized, and how organizations deal with the cultural and process changes that DevOps brings. The report also examines the barriers organizations face, as well as the rewards from DevOps including faster application delivery, higher quality products, and quicker recovery from errors in production.
How to Create a Successful AI Program
Jessica Davis, Senior Editor, Enterprise Apps,  10/14/2020
Think Like a Chief Innovation Officer and Get Work Done
Joao-Pierre S. Ruth, Senior Writer,  10/13/2020
10 Trends Accelerating Edge Computing
Cynthia Harvey, Freelance Journalist, InformationWeek,  10/8/2020
Register for InformationWeek Newsletters
Current Issue
[Special Report] Edge Computing: An IT Platform for the New Enterprise
Edge computing is poised to make a major splash within the next generation of corporate IT architectures. Here's what you need to know!
White Papers
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll