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California’s 3Com records $65 million goodwill charge

SHARE California’s 3Com records $65 million goodwill charge

WASHINGTON (Dow Jones/AP) — 3Com Corp. on Friday said it recorded a goodwill impairment charge of $65.6 million for the quarter ended Aug. 30, widening its loss for the period to 27 cents a share from 9 cents a share.

The Santa Clara, Calif., computer networking company wrote off goodwill of $45.4 million in its enterprise networking segment and $20.2 million in its CommWorks segment. 3Com reported the write-off in an amendment to its quarterly report filed with the Securities and Exchange Commission.

3Com said it had $900,000 in remaining recorded goodwill as of Aug. 30 after the charge. That goodwill was related solely to the company's Connectivity unit.

After the impairment, 3Com's reported net loss for the quarter widened to $97.6 million from $32 million. Its total reported assets fell to about $2.36 million from about $2.42 million. As of Aug. 30, 3Com said it had $25.2 million of net intangible assets remaining.

The goodwill charge was taken in connection with the company's adoption of an accounting rule, under which 3Com stopped amortizing net goodwill totaling $66.5 million. The loss was recognized as a change in accounting principle.

3Com provides broad-based local area network, or LAN, and wide area network, or WAN, systems. It offers switches, hubs, remote access systems, routers, network management software and modems. Its units include Personal Connectivity and Network Systems.

3Com shares finished Friday at $4.45, down 23 cents, or 4.8 percent, on the Nasdaq Stock Market.