|
Today's report from Web Editor Susan
Rush
• 3Com Beats Earnings Expectations
• Liberty Won't Cut It; AT&T To Sell TWE Stake
• Order Delays Hurt Harmonic
• Broadband Briefs
• Next Month In Broadband
Editor's Note: BroadbandWeek Direct will not be published from
Monday, December 25, 2000 through Monday, January 1, 2001. Daily news will
return on Tuesday, January 2. Happy holidays.
3Com Beats Earnings Expectations 3Com
Corp. posted a double-digit percentage gain in mid-day trading,
following the news that the networking equipment makers' Q2 loss will be
less than expected. Its pro forma net loss, excluding one-time costs, was
$52.4 million, or 15 cents a share, on revenue of $789.5 million. The loss
is 5 cents per share less than analysts were predicting.
Amid a torrid NASDAQ rally on the last day of trading before
Christmas, 3Com shares were up about 13 percent to $8.13 a share in mid-day
Eastern Time Trading.
3Com's carrier networking business posted sales of $95.4
million during the second quarter, a 43 percent decline from the $167.2
million reported during the same period a year ago. In an effort to return
profitability to the company, 3Com plans to create a wholly owned
subsidiary, CommWorks, from its carrier network business. Despite the
slowdown, the company says it remains bullish about the potential of the
telecom industry.
There is "little synergy" between 3Com's carrier
business and its consumer and commercial business, explained Bruce Claflin,
president and CEO, in a late Thursday conference call.
The company plans to take a one-time charge between $40
million and $60 million in its fiscal third quarter ending March 2,
according to Claflin. The completed restructuring is expected to generate
savings between $200 million to $250 million per year, part of which will be
achieved by reducing an unspecified number of employees.
Related Stories:
3Com
Takes A Hit On Wall Street, BroadbandWeek Direct, 12/5/00
3Com
Posts Minimal Loss,
BroadbandWeek Direct, 9/27/00
Liberty Won't Cut It;
AT&T To Sell TWE Stake
No dice, says the FCC.
AT&T Corp.'s offer to divest Liberty
Media -- instead of shedding its stake in Time Warner Entertainment -- to
meet conditions imposed by regulators when it purchased MediaOne Group is
being rejected. AT&T must sell off its TWE stake to be in compliance,
says the FCC.
Last week, AT&T said it would spin off
Liberty Media Group and other programming interests as a way to comply with
FCC conditions, as long as it received a favorable tax ruling from the
Internal Revenue Service. The company said it would rely on the sale of its
25 percent interest in Time Warner Entertainment as a fail-safe mechanism.
The FCC did not look favorably on the offer from
AT&T. "AT&T has proffered a conditional election, rather than
the single unambiguous election that the Merger Order requires," the
FCC said in a written order, following a 4-1 decision that the commission
expects AT&T to sell its TWE stake.
AT&T issued a statement that the FCC's order
"correctly points out that we have elected to divest TWE in order to
meet the Dec. 15 election requirement. We do not believe [the] order
requires us to take any action different from those we are already
pursuing..."
Related Stories:
Beep,
Beep! It's The Road Runner Shuffle , BroadbandWeek Direct,
12/18/00
AT&T
Writes Back To The FCC, CEDaily Direct, 12/21/00
Order Delays Hurt Harmonic
Harmonic Inc.'s
fourth quarter estimates may not be the Christmas present investors were
hoping to unwrap this holiday season. The broadband service provider is
anticipating a Q4 pro forma net loss of 20 cents to 30 cents a share, a much
wider loss than the 10 cents a share most analysts were estimating. Harmonic
shares were trading at $6.88 during morning trading, well off its 52-week
high of $157.50.
The company blames order delays from several of its
customers, including AT&T
Broadband, for the shortfall. Harmonic expects to report Q4 revenue of
$50 million to $55 million. Its Broadband Access Networks division
anticipates revenue of $25 million to $27 million, down from $40.4 million
in the previous quarter.
The company will announce its fourth quarter earnings results
on Jan. 24, 2001.
Related Stories:
AT&T
Broadband Suppliers Take It On The Chin, BroadbandWeek Direct, 11/27/00
Harmonic
Downgrades Q3 Sales, BroadbandWeek Direct, 11/14/00
Broadband Briefs:
- Microsoft Corp. confirmed plans to
launch its Xbox in North America and Japan in fall 2001, followed by a
European launch in the first quarter of 2002. Unlike Sony's
PlayStation 2, the Xbox, a future generation video game system, will be
broadband enabled at the onset of production. Broadband connectivity is a
future upgrade for current PS2 systems.
- Putting a cap on free DSL, NetZero Inc.
launches NetZero Professional, a new service plan aimed at users who spend
more than 40 hours a month online. The company's high-speed access service
will remain free to all users that stay below a newly instituted 40-hour a
month cap. If a user exceeds the allotted time in a given month, a service fee
of $9.95 will be charged if the user wants unlimited access that month.
- The FCC slaps SBC Communications Inc.
with a $6.1 million fine for falling short of standards set for opening local
phone markets to rivals in the Midwest.
- AT&T Corp. may use cable-TV systems,
including some from MediaOne Group, as payment for the $3.2 billion it could
owe Cox Communications Inc. and Comcast
Corp. for their shares in Excite@Home Corp.
Cox and Comcast could exercise their option to sell their stakes in
Excite@Home anytime after Jan. 1.
- Infinilink Corp.'s dsl-ON ready i200
full rate ADSL modem and i500 full rate ADSL router has been certified with Interspeed
Inc.'s SolutionXpert partner program.
- China Mobile Communications Corp. awards
a General Packet Radio Service network supply contract to Motorola
Inc. Motorola will deliver its GPRS high-speed mobile data network to four
Chinese cities: Hangzhou, Chengdu, Tianjin and Beijing. Financial terms of the
deal were not disclosed.
- British Telecommunications and One-2-One
lost their battle with Europe's Department of Trade and Industry over
arrangements set forth for paying for high-speed, third generation wireless
licenses. The plaintiffs maintained that the DTI was being unfair by making
them pay for their licenses before their rivals Vodafone and Orange. A court
judge rejected their arguments saying they were "illogical, unfair and
discriminatory."
- ISPhone Inc. plans to launch a
discounted PC-to-phone Internet telephony service through a number of Internet
service providers and carriers. MypcPhone was developed in conjunction with Vocalscape,
a Voice over IP software provider.
Next Month In Broadband
- Upcoming Broadband Events:
Jan. 6-9, 2001: 2001 International CES, Las Vegas Convention
Center, Las Vegas, NV; www.cesweb.org
Jan. 14-17, 2001: IEC @ SUPERnet, Santa Clara Convention Center,
Santa Clara, CA; www.iec.org/events/2001/supernet/index.html
Jan. 17-19, 2001: WCA 2001 Tech Symposium, San Jose, CA; www.wcai.com/events.htm
Jan. 22-25, 2001: NAPTE 2001, Las Vegas Convention Center, Las
Vegas, NV; www.natpeonline.com/system/index.cfm?conv=natpe2001
|
