3Com

(COMS)

posted narrower-than-expected second-quarter losses Thursday but said quarter-to-quarter sales were lower because of the slowdown in the telecom sector.

The Santa Clara, Calif., Internet networking company said its pro forma net loss was $52.4 million, or 15 cents a share, compared with a net loss of $41.3 million, or 12 cents a share in the prior quarter. 3Com, which spun off its profitable

Palm

(PALM)

unit earlier in the year, didn't provide a comparable year-ago number.

A poll by

First Call/Thomson Financial

showed seven analysts expected the company to lose 20 cents a share for the quarter. The company had lowered its second-quarter estimates by 13% in early December.

Revenue for the quarter was $789.5 million, but it included $22.8 million for sales of businesses the company has exited. Second-quarter revenue from ongoing businesses was $766.7 million, representing a 5% decline from ongoing revenue of $806.3 million in the prior quarter. One analyst on First Call expected second-quarter revenue of $765 million.

3Com also reported several non-recurring income and expense items during the quarter, including a gain on the sale of land and facilities of $176 million, a $250 million net charge related to the settlement of a shareholder lawsuit, a research and development charge of $8.3 million related to the acquisition of

Nomadic Technologies

and a $16.9 million net loss on investments.

Its shares were lately up 88 cents, or 12.2%, to $8.06 in

Island

trading after closing at $7.19 on the

Nasdaq

.