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3Com Corp. (Nasdaq: COMS) was down 3 3/16 at 9 9/16 early Tuesday after the company became the latest high-tech company to predict a revenue shortfall for the coming quarter.
The Santa Clara, California-based maker of networking equipment said revenue for the second quarter ended December 1st will be US$785 million to $800 million, below previous expectations, and resulting in a bigger loss than originally thought.
Revenue from ongoing businesses -- the product lines that are not being discontinued -- will account for $765 million to $780 million in sales, below the originally expected $870 million to $910 million. The loss before extraordinary items will be 19 to 23 cents per share, much wider than the 7 to 9 cents the company previously predicted.
The company attributed the shortfall in part to restructuring in the telecom industry, with many large customers consolidating and smaller ones facing financial constraints.
"3Com has not been immune to the trends affecting the telecom sector," said president and chief operating officer Bruce L. Claflin. "However, we believe this sector has substantial long-term growth opportunities, and we are investing accordingly."
3Com joins a growing list of high-tech firms issuing warnings about revenue and profits. On Thursday, similar warnings from computer maker Gateway, Inc. (NYSE: GTW) and Altera Corp. (Nasdaq: ALTR) sent stocks plunging as investors worried about a slowdown in the U.S. economy.
Gateway said slow sales of personal computers during the holiday season will result in flat revenue for the current quarter, and a write down for technology investments will further hurt results.
3Com said it will report first-quarter results after the close of trading
December 21st.
