3Com Shares Surge on Beat
MARLBOROUGH, Mass. (
) -- Networking specialist
3Com
(COMS)
overcame a sales slump to beat analyst revenue and profit estimates in its first-quarter results, released early Thursday.
The news pushed the company's shares up 33 cents, or 6.9%, to $5.11 in early trading, outpacing the broader tech market, which rose 0.9%.
3Com, which competes with
Cisco
(CSCO) - Get Report
and
Hewlett-Packard
(HPQ) - Get Report
, posted revenue of $290.5 million, down from $342.7 million in the prior year's quarter. Analysts surveyed by Thomson Reuters had expected sales of $278.15 million.
"We are pleased with 3Com's start to our new fiscal year," said Bob Mao, the 3Com CEO, in a statement released before market open. "We had a very good quarter, delivering solid revenue performance, improving gross margin over the prior year, and continuing to generate cash from operations."
The company's profit, however, took a big first-quarter hit. The company earned 2 cents a share on net income of $7.5 million, down from 20 cents a share and net income of $79.8 million the same period last year. The prior year's quarter, however, included $70 million from the resolution of a patent dispute, which boosted earnings by 17 cents a share.
Excluding items, 3Com earned 8 cents a share on net income of $30.6 million, compared with 11 cents a share and $43.4 million in the prior year's quarter. Analysts had expected earnings of 5 cents a share.
3Com recently
its security story in an attempt to put the squeeze on Cisco and
Juniper
(JNPR) - Get Report
and is also aggressively
its Chinese H3C subsidiary into the rest of the world.
The networking gear maker received an
upgrade
from Boenning & Scattergood earlier this month, with the analyst firm citing the impact of new products and customers' plans to upgrade their data centers.
Analysts have forecast revenue of $286.92 billion and earnings of 6 cents a share for 3Com's second quarter.
