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3Com stock takes a hammering despite good results

Networking giant 3Com's share price fell almost eight per cent yesterday despite reporting narrower than expected losses for its second quarter, with revenues down five per cent on the previous three months.
Written by Joey Gardiner, Contributor

Networking giant 3Com's share price fell almost eight per cent yesterday despite reporting narrower than expected losses for its second quarter, with revenues down five per cent on the previous three months.

The company also announced a restructuring creating a new division called CommWorks charged with looking after its carrier network business. 3Com's loss for the period was $52.4m, or $.015 a share, compared to analysts' forecasts of $0.21 a share. However, these forecasts were made in the shadow of a profit warning issued at the start of the month that wiped 25 per cent off the company's market capitalisation. Revenue slowed to $766m for the quarter, down from $806m from last year. Bruce Claflin, CEO of 3Com, said in a statement that the decline was due to a wider slowdown in the telecoms market. Claflin added that the new CommWorks division will deliver shareholder value by sharpening the focus of the company.
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