3Com warns of falling profit

3Com has added its name to the growing list of technology vendors issuing warnings of profits falling short of forecasts. The US networking company said its second-quarter revenue would grow by around $1.41 billion, confirming the fears of investors who had offloaded shares on Tuesday. 3Com said it expected earn around 23 cents per share in the third quarter to February 28. Earnings had been estimated at around 36 cents per share. An official third quarter earnings announcement is expected around 23 March. The number two networking vendor blamed falling demand in the US and Latin America and weakness in its distribution channels. Eric Benhamou, 3Com chairman and CEO, said he was not sure whether the decline in demand in the US was temporary, caused by issues such as the Y2K bug, or a part of a problem that could drag on for longer. However, he said he understood his rivals were experiencing a similar situation. 3Com's troubles are systematic of the present market. 1999 has already seen Compaq, Hewlett-Packard and Dell reporting weaker than expected sales so far this year. ®