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A year ago: Inventory Whacks 3Com Q2

Trouble and strife in USR life

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3Com's inventory problems made a severe dent in its fiscal second quarter profits, knocking them down to $15.1 million on $1.2 billion sales, against $115.7 million on $1.4 billion the previous year. The company has cut back shipments while excess stock clears from the channel, and has a class-action suit over its modem pile on its hands (see previous issue). Chairman Eric Benhamou says the company is prioritising inventory management and shifting to new technologies to dig itself out, but as the company misjudged the modem market badly last year, its not at all clear why it thinks it will get it right this time. Eric told analysts that an imminent resolution to the question of 56K modem standards (we hadn't heard this - any dope, readers?) could boost growth in 98, but again, it's not obvious how this will boost 3Com's growth. ®

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