3Com reported a 46 per cent drop in its Q4 net income on Tuesday last week, prompting its share price to drop by almost 10 per cent.
The share slump was in spite of record sales of $660.3 million in the three months ended May 31, a 39 per cent increase over Q4 1995's $476.3 million.
Sources said that earnings were on a par with analysts' predictions but the stock was damaged when the firm did not exceed expectations.
Net income fell to $29.5 million from $54.2 million in the same period last year. The fall in net income included a pre-tax charge of $53.3 million associated with the Axon Networks acquisition and a legal settlement.
3Com said that excluding the charge, net income actually increased by 37 per cent to $82.5 million.
Sales revenues for the fiscal year were a record $2.3 billion, up 46 per cent on 1995's $1.6 billion. Net income for 1996 also increased, from $144.6 million to $177.9 million.
The Apple Computer share price fell to below $20 on Nasdaq last week - much lower than the amount Sun Microsystems reportedly offered to buy the company.
Apple was valued at less than $2.5 billion when the share price fell below $20, its lowest valuation for many years. According to analysts, the price may be held down because Apple's large inventory in the indirect channel may be harder to clear than first thought.
Adobe Systems' net income fell by 38 per cent for its Q2 ended May 31 to $22 million, compared with $32.5 million for the same quarter last year. The profits included a $14.7 million write-off for research and development costs due to the purchase of Ares Software
Excluding the acquisition, net income was $34 million, compared with $35.2 million last year. Total turnover rose by eight per cent for the quarter to $204.3 million from $189.5 million the year before.
The firm reorganised internally for the coming fiscal year, with the formation of five divisions to focus on specialist markets which are Internet products, consumer products, graphics products, printing and systems and publishing products. It is working on a project with IBM to produce a line of network printers featuring Adobe Postscript.
Graphics software vendor Corel made it into the black for the first time in three quarters with a fiscal Q2 net income of $506,000. Turnover was $87.5 million for the same period, ended May 31, compared with a profit of $24,000 on revenue of $35.2 million for the same quarter last year.
The figures were the result of the acquisition of Wordperfect from Novell earlier this year. Corel's stock fell by 50 cents, closing at $12 on the Nasdaq stock exchange following publication of the results.
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