3Com earnings, topping forecasts, suggest a rebound

Article Abstract:

3Com's 1st qtr 1999 net income report of $93.7 million, or 26 cents a diluted share, suggest a rebound for the computer-networking equipment vendor. Per-share earnings netted 24 cents, excluding a one-time credit from the company's Jun 1997 acquisition of US Robotics. This easily surpassed the 20-cent projection by a consensus of analysts. By comparison, the company's 1st qtr 1998 results showed a loss of $51.2 million, or 15 cents a share, which included charges for the US Robotics deal. Revenue of $1.41 billion represents a 12% decline from the 1st qtr 1998's $1.6 billion. The revenue total, however, showed a 2% improvement over the 4th qtr 1998 and topped analysts' forecasts of $1.39 billion. 3Com's decline stemmed from the difficult acquisition of US Robotics, which led to an inventory excess of modems, and pricing pressure on most networking products. Analysts say some of the turnaround stems from an industry rumor that Intel plans to purchase 3Com.

Communications Equipment, Computer network equipment industry, Network hardware industry, Finance, Company sales/revenue, Company sales and earnings, 3Com Corp., COMS, Company earnings/profit

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Nortel agrees to acquire Bay Networks

Article Abstract:

Nothern Telecom is set to acquire Bay Networks for $7.68 billion ($32.40 per share). By acquiring Bay, Nortel hopes to expand their product lines for telephone and Internet companies. However, upon the agreement, Bay's shares flew up 8.6% to 30.75, while Nortel's stocks fell by 15%, or $9.6875. The move to takeover Bay has been criticised, because of Bay's struggles to compete with Cisco Systems, and because the corporate data-networking market shows no sign of growth. The takeover could speed up the race in the telecommunications industry to consolidate into corporate giants, capable of providing a complete array of systems for voice, video, and data communication.

Comment:

Nortel to acquire Bay Networks for $7.68 billion

United States, Canada, Asset sales & divestitures, Acquisitions & mergers, Company Planning/Goals, Northern Telecom Ltd., Bay Networks Inc., Article

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