3Com revenue edges up 6.5 p.c YoY

BANGALORE, INDIA: 3Com Corporation today reported that its revenue for the third quarter of the fiscal ended February 26, 2010, was $345.9 million, compared to revenue of $324.7 million in the corresponding period in the previous fiscal, representing a 6.5 per cent increase.

All regions delivered double-digit revenue growth over the same fiscal year 2009 quarter, except China. Total revenue in the company's China based operations was down 1.3 per cent from the same prior year period, primarily the result of a 77.9 percent decline in sales to Huawei, which were $12.4 million in the quarter, said a press rlease.

China direct sales were $165.9 million in the quarter, a 29.7 percent increase over the corresponding prior year period.

3Com’s gross margin was 60.4 per cent in the third quarter of fiscal year 2010, compared with gross margin of 57.2 percent in third quarter of fiscal year 2009. On a non-GAAP basis, gross margin was 60.5 per cent in the third quarter, compared with 57.4 per cent in the same prior year period.

3Com’s operating profit margin was 6.5 per cent in the quarter, up from 0.5 per cent in the corresponding prior year period. On a non-GAAP basis, operating profit margin was 13.9 per cent in the third quarter, compared with 11.3 per cent in the third quarter of the prior year.

Net income in the quarter was $41.4 million, or $0.10 per diluted share, compared with net income of $1.9 million, or $0.00 per diluted share in the third quarter of the prior fiscal year.

On a non-GAAP basis, third quarter fiscal year 2010 net income was $67.2 million, or $0.16 per diluted share, compared with net income of $49.1 million, or $0.13 per diluted share, in the corresponding prior year period.

3Com generated $89.7 million in cash from operations in the quarter. On a year-to-date basis, 3Com generated $224.8 million in cash from operations. 3Com’s cash and equivalents and short term investments balance at February 26, 2010 was $795.0 million, the release added.

“We are very pleased with 3Com’s continued strong performance in the quarter,” said Bob Mao, 3Com’s chief executive officer. “We delivered strong sequential and year-over-year revenue growth while improving gross and operating margins, and generating almost ninety million dollars in cash from operations.”