3COM Corp, the money-losing computer networking equipment maker that agreed to be taken over by Bain Capital LLC, forecast yesterday it will be profitable in about four years, helped by demand in China and India.
The company will earn a profit "around" 2011 as sales rise about 60 percent from last year to US$2 billion, said Jay Zager, chief financial officer of the Massachusetts-based company.
3Com plans to target emerging markets such as India, the world's fastest-growing major telecommunications market, and the Middle East, Zager said. The strategy may build on the success of 3Com's former venture in China with Huawei Technologies Inc, Bain's partner in the US$2.2 billion bid to buy the United States company.
"The trick is to offer more products," Zager said. "We're going to focus on emerging markets like India and the Middle East, places where there's going to be greater annual growth."
3Com, which competes against leader Cisco in the US$16-billion global market for network switches, will post an operating profit in the year ending in May 2008, Zager said, declining to specify a figure.
The average of four analyst estimates compiled by Bloomberg News is for a US$50.7 million profit.
The purchase will lead to some job cuts at the research and development, supply-chain and information technology units of the company, which employs 6,000 people, Zager said, without providing a figure.
Shenzhen-based Huawei will hold a 16.5 percent stake as part of the acquisition, scheduled to be completed in the first quarter of 2008.
Bain said last week Huawei's involvement won't be a threat to US national security and the company has voluntarily submitted the acquisition agreement for a review by the US Committee on Foreign Investment.