3Com Corporation Reports Record Sales and Net Income in 3Q 1995

Strategic Insights -

3Com Corporation, a leading global data networking company, announced record sales of $338.7 million for the third quarter ended February 28, an increase of 55 percent from the year-ago quarter. Net income of $45.3 million ($.63 per share) increased 82 percent as compared with pro forma net income of $24.9 million ($.36 per share) in the third fiscal quarter of 1994. The company attributes the quarter's results to the tangible benefits of its acquisitions, especially in switching, as well as the success of new products from its adapter, hub, and internetworking divisions.

Key Takeaways:

  • 3Com reported record sales of $338.7 million in 3Q 1995, a 55 percent increase from the year-ago quarter.
  • Net income of $45.3 million ($.63 per share) increased 82 percent compared to pro forma net income of $24.9 million ($.36 per share) in 3Q 1994.
  • The company attributed the quarter's results to the benefits of its acquisitions, particularly in switching, as well as the success of new products from its adapter, hub, and internetworking divisions.
  • Sales of the company's systems products grew 65 percent from the year-ago quarter and accounted for 41 percent of total sales.
  • Sales of network adapters, including the industry-leading EtherLink III family of desktop and PC Card adapters, were 55 percent of total sales and increased 54 percent year-over-year.
  • By geographic region, sales to the Americas accounted for 47 percent of total sales, up 51 percent compared to a year ago, while sales to the combined European and Asia/Pacific markets increased 59 percent to account for 53 percent of total sales.
  • The company introduced several new platform under its High Performance Scalable Networking (HPSN) architecture during the quarter, including an ATM backbone switch and two new LAN switching platforms based on 3Com's ISE (Intelligent Switching Engine) ASIC.
  • 3Com acquired ISDN development partner, AccessWorks Communications, and introduced 10 Mbps and Fast Ethernet (100 Mbps) adapters for high-performance PCI personal computers.
  • The company's consolidated balance sheet as of February 28, 1995, showed $714.2 million in assets, $221.3 million in liabilities, and $382.1 million in stockholders' equity.

Statistics:

  • Record sales of $338.7 million in 3Q 1995 represent a 55 percent increase from the year-ago quarter.
  • Net income of $45.3 million ($.63 per share) increased 82 percent compared to pro forma net income of $24.9 million ($.36 per share) in 3Q 1994.
  • Sales of systems products accounted for 41 percent of total sales in 3Q 1995, growing 65 percent from the year-ago quarter.
  • Sales of network adapters accounted for 55 percent of total sales in 3Q 1995, increasing 54 percent year-over-year.
  • Sales to the Americas accounted for 47 percent of total sales in 3Q 1995, up 51 percent compared to a year ago.
  • Sales to the combined European and Asia/Pacific markets accounted for 53 percent of total sales in 3Q 1995, increasing 59 percent compared to a year ago.
  • The company introduced 10 new products under its High Performance Scalable Networking (HPSN) architecture during 3Q 1995.

Sources:

  • "3Com Corporation Announces Record Sales and Net Income for Third Quarter Ended February 28, 1995" (Business Wire, March 14, 1995)
  • "3Com Corporation Consolidated Balance Sheet" (unaudited, February 28, 1995)
  • "3Com Corporation Overview" (NASDAQ: COMS)