For the three months ended June 2, 3Com said it had a loss of $146.8 million, or 42 cents a share, compared with net income of $87.5 million, or 24 cents a diluted share, in the same period a year earlier.

Revenue declined 38 per cent to $763.7 million from $1.23 billion in the year-earlier period, as the Santa Clara, company slowed production of modems and networking gear for big companies. 3Com in March said it would sell or discontinue those divisions. But revenue topped 3Com's projection of $675 million to $750 million.

Chief executive Eric Benhamou said sales of soon-to-be-discontinued products declined less than expected, while sales of wireless gear and high-speed modems grew faster than expected.

Chief financial officer Michael Rescoe said 3Com now expects sales to resume growing in its fiscal first quarter, ending September 1, three months sooner than previously projected. Rescoe said 3Com expects fiscal first-quarter revenue of $775 million to $825 million.

That said, Rescoe added that 3Com expects losses to continue for two more quarters, with operating losses of $210 million to $240 million in the first quarter. Benhamou said 3Com probably won't make a profit until its fiscal fourth quarter, ending in May 2001.

-- (The Wall Street Journal)