Zacks_Analysts' Blog : 3Com Grabs Multi-Million Dollar Deal - Analyst Blog

Things are going well for the global enterprise networking major 3Com Corporation (COMS). The company recently disclosed that it has grabbed a three-year, multi-million dollar deal with the Department of Education and Training (DET) in Northern Australia.



As per the terms of the agreement, 3Com will create a broad range of high-value H3C enterprise networking solutions to fulfill DET NT’s wireless and networking needs for unified communications and multimedia learning. The company’s track record of successful project execution in the education sector and competitive pricing has helped it to secure this contract.



This is not the only big government deal that the company has won in recent times. A few months back, 3Com won a deal to supply enterprise switching hardware, software and supporting services to the Queensland’s Public Safety Network (PSN) initiative. 3Com will conduct the whole process in association with Communications Design & Management Pty Limited (CDM). This multimillion dollar deal is expected to generate substantial recurring revenue for the company in the years to come. The company claims that this is one of its largest wins in Australia and New Zealand.



Deal wins apart, positive news flows have been coming from other ends as well. The biggest news in recent times was Hewlett-Packard (HPQ) getting the final approval from the European Union regarding its acquisition of 3Com. The $2.7 billion acquisition creates a win-win situation for both the entities, as it enables H-P to challenge networking leader Cisco Systems Inc. (CSCO) and grab an additional share of the networking business. 3Com will also benefit from H-P’s superior brand value and find a broader market for its new products.



With decent operational results, global economic recovery and strong performance in its China-based business, 3Com has outperformed management expectations and achieved profitability on a GAAP basis for the sixth consecutive quarter. The result inspires confidence regarding the company’s ability to sustain recent improvements. Moreover, Hewlett-Packard’s recent acquisition announcement of 3Com is positive news for the company. However, integration of the two businesses could be something to watch out for.
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