3Com, Cableton Post Positive Results
Network equipment vendors 3Com Corp. and Cabletron Systemsposted strong quarterly financial results this week.
3Com yesterday [9/21] reported net income of $137.5 million
for its first fiscal quarter, up from $93.7 million in the
same quarter last year. Revenue remained roughly even, at
$1.387 billion in the quarter compared with $1.4 billion a
year ago. The company attributes the improved margins in
part to streamlined operations, improved supply-chain
management, reduced sales and marketing expenses, and a
lower head count.
3Com has just over 12,400 employees, nearly 600 fewer than
it employed at the beginning of the quarter.
3Com's Palm computing device is taking an increasingly
important role in the company's fiscal health. Revenues
generated from handheld devices increased 50%, compared with
the same period a year ago, to $174.2 million and
representing 13% of 3Com's overall revenue.
Later this year 3Com plans to announce systems for
enterprise networks that are based on the Palm operating
system, says 3Com chairman and CEO Eric Benhamou.
And Cabletron continues to recover its financial heath
slowly. On Monday, Cabletron reported $12.5 million in net
income for its second fiscal quarter, up from $10.5 million
in the same quarter last year. Revenue dipped slightly, with
Cabletron posting $356.6 million, down from $370.6 million a
year earlier. CEO Piyush Patel attributes the growth to
increased sales of the SmartSwitch Router.
Despite the strong posting, Cabletron's stock tumbled more
than 10% yesterday [9/21] following news that Compaq
Computer will no longer resell Cabletron's networking
equipment.
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