3Com Defies Network Sector Woes

By Kevin Petrie ,

3Com

(COMS:Nasdaq) made a surprisingly strong surge today in the absence of any news.

While several key networking equipment stocks have stumbled in recent days, traders on Wall Street said this morning that the company, at an ISDN conference in Santa Clara, Calif., hinted that earnings for the quarter ended Nov. 31 would be surprisingly strong. The company made its formal presentation on Wednesday.

Shirley Stacy, investor relations manager at 3Com, said the company does not make projections about future performance.

3Com was up 4 1/8 this week, including a gain of 2 3/8 to 79 1/8 midday Thursday.

3Com's earnings report will come out later this month. In the same period last year, 3Com reported net income of $16.3 million, or nine cents a share, on revenue of $563.5 million. According to First Call, analysts' consensus estimate is for net income of about 55 cents a share.

Also boosting optimism about 3Com: an upbeat speech by Reginald Best, vice president for 3Com's access products division, at the ISDN conference.

The recent surge in 3Com raises the issue of a potential shakeout in the networking equipment sector, some traders said. In recent days,

Cisco Systems

(CSCO:Nasdaq),

Ascend Communications

(ASND:Nasdaq),

Cascade Communications

(CSCC:Nasdaq) and

Shiva

(SHVA:Nasdaq) have all performed weakly.

By Kevin Petrie

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