3Com(Nasdaq: COMS) dropped 49 U.S. centsto $5.68 in morning trading Wednesday, following reports that the company’sresults for the fiscal fourth quarter may be worse than previously thought.
The Santa Clara, California-based maker of networking equipment reportedly said in a Securities and Exchange Commission filing that it predicts a”wider range of outcomes” for the quarter ending in June than it saw inMarch, when it forecast revenue for the quarter of $550 million to $600million.
In March, 3Com started a restructuring process designed to save about $1 billion per year.
Monday, the company it would lay off 3,000workers over the next several quarters. The layoffs, which will bring the company’s workforce down to 7,000 people from 10,000, will make “a majorcontribution to 3Com’s return to profitability,” 3Com said. The company has said it aims to post a profit in fiscal 2002.
3Com, like other companies that depend on the Internet and telecom sectorsfor business, has seen demand for its products fall as a weak economy leadscustomers to cut back on spending. The company reported a drop in revenueand a loss for the third quarter ended March 2nd.
3Com said Monday that it has seen “sizeable reductions” in discretionaryexpenses as a result of its restructuring so far, adding that it is”actively evaluating further cost-savings opportunities in the areas ofplant, property and equipment, as well as lowering costs for productdesign.”
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