3Com rises after fiscal 1Q report, 2Q outlook

3Com shares rose 7 cents, or 3.4 percent, to $2.16. In the past year, the stock has traded between $5.11 and $1.76.

3Com said late Monday that it earned 20 cents per share, helped by increased sales, a benefit from a patent dispute settlement and lower costs. It lost 5 cents per share in the year-ago quarter.

Excluding the patent dispute settlement benefit, 3Com earned 11 cents per share; analysts polled by Thomson Reuters, who usually exclude special items from their estimates, expected a profit of 6 cents per share.

In an earnings conference call with analysts, the company forecast second-quarter revenue of $345 million to $350 million.

Analysts expect $320.7 million in revenue.

In a client note, Kaufman Bros. analyst Manuel J. Recarey kept his "Hold" rating and $3 price target for the stock, saying he feels more positive about the company but it "still faces uncertainty."

"This was the second consecutive quarter that 3Com exceeded expectations and gave positive guidance, thereby enhancing management credibility and demonstrating execution despite the challenging macroeconomic environment," he said.

However, he thinks 3Com will be impacted by other issues, including general economic weakness that he expects will hurt information technology spending next year.