Briefs Hindsight And Foresight: June 28, 2004

3COM NARROWS LOSS IN 4Q

For the quarter ended May 28, 3Com reported a loss of $19 million, or 5 cents per share, compared with a loss of $38 million, or 11 cents per share, in the same quarter a year ago.

Revenue for the quarter climbed to $183.3 million, up from $171.8 million in the same quarter last year.

The growth was spurred by stronger sales across several of 3Com's enterprise networking lines, such as wireless, VoIP and security. In particular, VoIP products were strong performers, with revenue almost doubling sequentially, said Bruce Claflin, president and CEO of 3Com, in a statement.

Sales of the company's stackable switching products to the SMB market also grew. At the same time, sales of modular switches and routers sourced from 3Com's joint venture with Huawei Technologies declined approximately 15 percent sequentially.

BRIGHTMAIL UPGRADES ITS ANTISPAM WARES
Brightmail's new Anti-Spam Version 6, launching Monday, adds better detection and filters for non-English spam detection, updated URL filters and the ability to block images embedded in spam. The filters now can search for and block a specific MIME attachment rather than an entire type of attachment, whether it's an image, audio, ASCII or an executable file.

Support for 11 languages should ease the pain of companies recently inundated with spam written in Cyrillic alphabet and other languages, said Carlin Wiegner, director of product management at Brightmail. New management capabilities let companies manage multiple Brightmail systems from a single console and set up more granular policies for different departments, blocking one type of spam for one group while allowing it in another, Wiegner said.

The software costs $1,399 per year for up to 49 users. In related news, Symantec completed its $370 million cash acquisition of Brightmail last week.

MICROSOFT YUKON, WHIDBEY BETAS DOWN TO THE WIRE
Microsoft execs said the company has put the pedal to the metal to get promised betas for SQL Server 2005 (Yukon) and Visual Studio 2005 (Whidbey) out by month's end. Microsoft has promised the betas in the first half of the year, the end of which is fast approaching.

Last Wednesday, Bill Baker, general manager of Business Intelligence for Microsoft, said beta status was "a day-to-day thing." In a meeting with CRN, Baker said, "I just came from the ship room. There's a big screen up and we're in the 'do we take this fix or not' [mode]."

Microsoft is hosting Tech Ed 2004 Europe in Amsterdam this week, which could serve as the betas' coming-out party.

INGRAM MICRO REAFFIRMS 2Q EARNINGS, SALES OUTLOOK
Ingram Micro reaffirmed its sales and income estimates for its second quarter ending July 3.

Company executives said they expect earnings of $21 million, or 13 cents per share, to $25 million, or 16 cents per share, on revenue of $5.6 billion to $5.8 billion in the quarter. That forecast would mean year-over-year growth of 8 percent to 12 percent for the quarter, according to the company.

Kent Foster, Ingram Micro's chairman and CEO, said the company will continue to increase its services business while seeking to expand its share of the two-tier distribution business in the industry. "[Research firm] IDC did a study for us [finding] that in a trillion-dollar IT market, two-tier is one-fifth of the market. There is modest expansion available there," Foster told analysts. "We can move into other areas that are very close to where we are today. There are other vendors that can use our services. We believe that enlargement of the pie is starting to occur."

In the past four years, Ingram Micro has reduced its days of working capital to 18 from 25, Foster said, noting that each one-day improvement translates into $65 million in additional cash. "That has reduced our debt requirements from 36 percent four years ago to 18 percent now," he said.

NETWORK ASSOCIATES NOT FOR SALE, COMPANY SAYS
In an attempt to lay to rest persistent rumors of a pending acquisition, Network Associates executives last week said unequivocally that the company is not for sale.

Focusing on what it means to be a public company, a spokeswoman effectively distanced Network Associates from speculation of an acquisition by stating that while it "would need to legally consider offers that benefit its owners, the shareholders of Network Associates," the company was "not considering offers from Microsoft or any other company at this time."

The spokeswoman made the statement after Network Associates declined to comment on claims made by several Wall Street sources that it was quietly looking for a buyer and that Microsoft is in the running to acquire the company.