Tuesday, 3Com Corp., a secure and converged networking solutions provider, boosted its first-quarter financial guidance taking into consideration a stronger-than-anticipated performance from China operations.

The Marlborough, Massachusetts-based company now expects first quarter earnings on a non-GAAP basis in the range of $0.06 to $0.08 per share, up from the prior guidance of $0.03 to $0.05 per share. On average, three analysts polled by First Call/Thomson Financial expect the company to earn $0.04 per share for the quarter.

In the year-ago quarter, the 3Com posted a net loss of $18.7 million.

Non-GAAP operating profit is seen in the range of $28 million to $32 million, compared to the range of $15 million to $20 million as per the previous guidance.

The company noted that the revised guidance excludes the one-time impact of the company's agreement with Realtek that settled a patent dispute between the parties.

For the first quarter, the company anticipates consolidated revenues in the range of $335 million to $340 million, higher than its previous guidance of $325 million to $330 million. The Street currently estimates revenues of $327.72 million for the quarter.

In the similar quarter last year, the company reported sales of $319.4 million.

3Com now expects sales in China to grow 10% sequentially from the fourth quarter, rather than earlier predicted slight sequential growth. The increase in sales was attributed primarily to stronger-than-expected sales to Huawei, but the company continues to expect sales to Huawei to decline as a percentage of total sales and in absolute dollars. In all other geographies outside of China, the company expects networking segment to deliver modest sequential growth.

On a consolidated basis, the company anticipates first quarter gross margins to be at least 1 point higher than in the fourth quarter.

3Com's first-quarter financial results are scheduled for release during the third week of September.

COMS is trading up $0.21 or 11.29% at $2.07 on a volume of about 5.69 million shares.

Source:RTTNews