First-quarter net losses widened sharply at 3Com Corp., soaring nearly 300 percent as the struggling network-equipment maker saw sales evaporate compared to the year-ago period.
The company reported a first-quarter net loss of US$232.4 million on sales of $389.6 million. That represents a 293 percent increase in losses compared with the same period last year when the company lost $59.2 million.
In addition to skyrocketing losses, 3Com saw its first-quarter revenue tumble by 58 percent compared to the year-ago quarter, when it recorded revenue of $933.8 million.
3Com has struggled in recent quarters and is in the midst of a planned restructuring intended to return the company to profitability. In a statement, the company downplayed the impact of the results, however, calling the first quarter "a quarter of solid progress in 3Com's transformation."
Among the bright spots noted, 3Com said it is on track with efforts to boost margins and is ahead of plans to reduce costs, including staff cuts. The company said it is on track to cut 1,000 more staff than the initial 5,000 job cuts the company has already announced. The job cuts, which are to be completed by November, will reduce 3Com's staff from 12,000 to 6,000, the statement said. In addition, the company said it has $1.45 billion in cash and short-term investments.
Looking ahead, the company is on track to show a profit during the fourth quarter and should see a return growth with the introduction of new products during the course of the year, despite ongoing uncertainty about the economy, the statement said.