Networking concern 3Com (NASDAQ: COMS), whose colleagues include Cisco Systems, Inc. (NASDAQ: CSCO) and Hewlett-Packard Company (NYSE: HPQ), made an adjusted 10 cents per share in the company's fiscal fourth quarter. Not so great, considering 3Com made an adjusted 9 cents per share one year ago.

In terms of estimates, 3Com did well. The market was expecting 5 cents per share. The analyst community was obviously worried that the recession was going to hamper profit growth more than it did. Of course, who could blame the analysts, right? After all, 3Com did see a better than 8% slide in top-line sales.

The quarter is winding down, and here are some highlights from this past week's earnings coverage from BloggingStocks:

• Air Products & Chemicals Inc. (NYSE: APD) lowered its guidance for the current quarter.
• AutoZone Inc. (NYSE: AZO) missed Q4 earnings estimates despite a modest increase in profits.
• Bed Bath & Beyond Inc. (NASDAQ: BBBY) reported disappointing Q2 results that met analysts' expectations.
• Chevron Corp. (NYSE: CVX) faces earnings declines if the Paulson plan fails, says Jim Cramer
• Circuit City Stores Inc. (NYSE: CC) earnings declines finally led to the ouster of CEO Schoonover.
• Discover Financial Services (NYSE: DFS) beat Q3 expectations despite charges and reserves.
• General Electric Co. (NYSE: GE) lowered its Q3 and full-year forecast due to financial sector woes.
• KB Home (NYSE: KBH) reported a greater-than-expected loss for Q3, and yet shares rose.
• Lennar Corp. (NYSE: LEN) posted significantly smaller Q3 losses on cost cutting.
• McCormick & Co. Inc. (NYSE: MKC) topped Q3 expectations due to the sale of a brand.
• Nike Inc. (NYSE: NKE) posted better-than-expected Q1 results despite a decline in net income.
• Research in Motion Ltd. (NASDAQ: RIMM) posted strong Q2 results accompanied by a weak forecast.
• Rite Aid Corp. (NYSE: RAD) Q2 net loss more than doubled and revenues were flat
• Secure Computing Corp. (NASDAQ: SCUR) missing estimates didn't stop a deal with McAfee (NYSE: MFE).
• 3Com Corp. (NASDAQ: COMS) Q1 results topped both analysts estimates and previous guidance.
• 3M Co. (NYSE: MMM) faces significant earnings declines if the Paulson plan fails, says Jim Cramer.

Also, are analysts' expectations for the the coming year too optimistic?

Upcoming quarterly reports include Circuit City (NYSE: CC), Walgreen (NYSE: WAG), Pepsi Bottling Group (NYSE: PBG), Constellation Brands (NYSE: STZ), Marriott International (NYSE: MAR), Family Dollar Stores (NYSE: FDO).

Visit AOL Money & Finance for more earnings coverage.

Better than expected earnings are driving 3Com Corporation (NASDAQ: COMS) stock today. The lagging networking and router company posted earnings last night of 11 cents non-GAAP EPS on revenue of $342.6 million. First Call estimates were 6 cents EPS on $337.12 million in revenue. The results were above the already raised targets.

3Coms's prior raised guidance from August had been for revenues to come in a range of $335 million to $340 million ($10 million higher than before) with earnings per share of $0.06 to $0.08. 3Com generated $39.3 million in cash from operations. The company's cash and cash equivalents as of August 29 were $541.4 million.

Even more interesting is that on a GAAP basis when benefits of a legal patent settlement are included, 3Com would have actually earned 20 cents EPS. The other translated results were a 7% rise in revenues because of strong sales in Asia lasting longer than 3Com had expected. It also removed 33% from operating expenses.

It is far too soon to say that a turnaround is underway here. But these results are better than even most skeptics would have assumed. The company's small size now with a market capitalization of under $1 billion means that these results will also not translate to strength in the larger competitors.

Shares are up over 5% at $2.21 this morning on active trading volume, but with so few analysts following it and with the stock being relegated to a "cult stock" or a "has been" stock, the verdict is still a long ways off on this one.

Earnings reports continue to dribble in as the quarter winds down. Much of the attention this week will be on homebuilders KB Home (NYSE: KBH) and Lennar Corp. (NYSE: LEN) as investors look for any sign that the housing sector has bottomed (home sales numbers are also due out this week; see below). Analysts surveyed by Thomson Financial anticipate that both companies will report that they narrowed their losses in the most recent quarter.

KB Home's expected $1.25 per share loss, on revenue of $725.5 million, compares to the previous quarter loss of $3.30 and to a year-ago loss of $6.19. However, KB Home's losses in the past few quarters have been deeper than expected. The Los Angeles-based homebuilder's long-range earnings growth forecast is 10.5%, less than the S&P 500. Analysts continue to recommend holding KB Home, and have for at least 120 days. Shares, however, reached a new 52-week high of $31.69 on Friday, and they are up 10.5% year to date.

Lennar is expected to post a loss of 52 cents per share, on revenue of $1.1 billion. That compares to the previous quarter's per-share loss of 76 cents and to a year-ago loss of $3.25. While Lennar also has tended in the past few quarters to miss expectations, the Miami-based company managed a positive surprise in the first quarter of 2008. Lennar's long-range earnings growth forecast is 10.3%, about the same as KB Home's. Analysts also recommend holding Lennar. Friday, shares of Lennar also reached a 52-week high, $27.75, but they are down 6.4% year to date.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Archer Daniels Midland Co. (NYSE: ADM) said Q4 profit plunged, missing analysts' expectations.
• Berkshire Hathaway Inc. (NYSE: BRK.A) posted yet another solid quarter and topped analysts' expectations.
• Cisco Systems Inc. (NASDAQ: CSCO) reported solid results and reaffirmed its revenue guidance.
• General Mills Inc. (NYSE: GIS) performance despite rising commodities costs impressed Jim Cramer.
• Hansen Natural Corp. (NASDAQ: HANS) Q2 earnings surged on popularity of Monster energy drink.
• Humana Inc. (NYSE: HUM) beat Q2 expectations, sending shares of health insurers higher.
• LeapFrog Enterprises Inc. (NYSE: LF) narrowed its Q2 loss, sending shares up near its 52-week high.
• MGM Mirage (NYSE: MGM) Q2 profit tumbled but revenues topped analysts' expectations.
• NetSuite Inc. (NYSE: N) cut its Q2 loss and revenues surged on 400 new customers.
• Orbitz Worldwide Inc. (NYSE: OWW) narrowed its net loss while revenues inched upward.
• Polo Ralph Lauren Corp. (NYSE: RL) easily topped Q1 expectations and raised its full-year guidance.
• Pzena Investment Management Inc's (NYSE: PZN) CEO admits that its Q2 was "awful, just terrible."
• 3Com Corp. (NASDAQ: COMS) raised its Q1 profit and sales forecasts due to gains in China.
• Toyota Motor Corp. (NYSE: TM) net income fell due to the strong yen and rising materials costs.
• Warner Music Group Corp. (NYSE: WMG) reported a smaller-than-expected Q3 net loss.
• World Wrestling Entertainment Inc. (NYSE: WWE) flat year-over-year earnings fell short of estimtates.

3Com Corp. (NASDAQ: COMS) shares are up around 12% so far today after the network equipment maker raised its first-quarter sales and profit forecasts due to gains in China. Not only did 3Com raised guidance, it also raised it above analyst estimates.

3Com, which makes routers, switches and cables for telephone companies, has more than quadrupled sales in China since buying out Huawei's stake in their joint venture H3C last year. China now accounts for almost half the sales at 3Com.

Some may be concerned due to recent reports of China's slower economic growth. But two things are worth mentioning here. First, China's slower GDP growth is still a whopping 9%, down from 11%. And second, telecom infrastructure will likely continue at the same pace.

It isn't surprising, then, that 3Com has raised guidance for both sales and earnings. Specifically, 3Com expects sales in China to be 10% higher than in the previous quarter on stronger sales to Huawei.

The Commerce Department's Q4-2007 final revision for GDP came in at +0.6%, but that was in-line and the data is now more than 75-days old. But it does highlight the concerns that the growth rates this quarter just can not be good. It also set the tone for more selling. It just goes to show that it still pays in today's climate to sell when you are feeling good about the market and buy when you feel overly concerned.

The Federal Reserve also auctioned off some $75 billion in treasury securities after receiving bids for some $86.1 billion. This was the first auction of its kind and the next auction is set for April 3. Below are the unofficial closing prices:

• DJIA 12,302.70 (-120.16; -0.97%)
• NASDAQ 2,280.83 (-43.53; -1.87%)
• S&P500 1,325.77 (-15.36; -1.15%)
• 10YR-TBond 3.534% (+0.04%)
• Key 52-Week Lows

If you look at the unusual increase seen in short selling in many of the NASDAQ names from this morning, you might scratch your head. But that's the world we live in.

The US government has been looking into a deal which would allow Chinese interests to buy US telecom equipment company 3Com (NYSE: COMS). That investigation is now being extended, a sign the the transaction could be killed.

According to the FT, The Committee on Foreign Investment in the United States "is studying possible national security implications of the 3Com takeover." Huawei Technologies, a Chinese telecom equipment maker, could end up with intrusion prevention technology used by the US Defense Department..

The investigation pits the needs of investors against concerns of the government. 3Com lost money in the last quarter. The only reason the stock trades at $4.52 is the buyout offer. The stock could easily drop to it recent low of $3.22 if the deal is killed.

Aside from the investor pain that the government could cause, the news opens the door wider to issues of which companies are strategic to US interests and which are not. As sovereign funds from other nations put money into US banks and technology companies the problems are likely to become more complex.

The American government is getting into the business of deciding whether shareholders can get money from some corporate buyouts.

Douglas A. McIntyre is an editor at 247wallst.com.

This morning 3Com (NASDAQ: COMS) announced that private equity firm, Bain Capital, would put it out of its misery and pay $2.2 billion in cash for the company. 3Com has lagged so far behind that it has been painful to watch. 3Com and Cisco Systems (NASDAQ: CSCO) indeed could provide at least two to three chapters in an investing teaching and history book. Here's the CliffsNotes version:

Summer of 1994 was a tough technology environment. Technology had a great run from 1990 through 1994, till summer that is. Valuations contracted and investor fatigue set in for about four to five months. I was traveling through Silicon Valley with a couple of British portfolio managers visiting companies. One day we had a breakfast meeting with then CEO Eric Benamou of 3Com and lunch with a senior VP at Cisco (whose name escapes me). Benamou was an intellectual, a refined man, but did not possess the street smarts necessary for a tech company CEO. He was arrogant and bluntly declared that Cisco's days were numbered and 3Com would acquire any tech company necessary to achieve total domination. OK, great, and we went on to Cisco for lunch.

The senior VP was a classy guy, never said a bad word about any competitor and just explained Cisco's game plan and execution philosophy. Here is the funny part: In July 1994, BOTH companies had a market capitalization of $9 billion.

According to the Wall Street Journal [subscription required] Marlborough, MA-based 3Com Corp. (NASDAQ: COMS) is going private with the help of Bain Capital and Huawei Technologies for more than $2 billion -- or $5.50 a share. 3Com is up 34% to $4.94 in pre-market.

3Com has been hobbled for most of this decade but it has a storied history. Its founder invented Ethernet -- a way for computers to share information. It bought a company that made a very popular modem during the era when people dialed up the Internet on a telephone line. And with this acquisition came a technology which became the Palm Pilot -- a Personal Digital Assistant (PDA) which was an indispensable appendage for dot-commers in the 1990s.

Unfortunately, 3Com's financial position was weak -- it lost $89 million on $1.27 billion in sales in the year ending June 2007 but it generated $58 million in cash. It couldn't maintain its technology lead and it was surpassed by competitors in all its markets.

Universities have been known to take donations from anyone willing to write a check. For those willing to donate significant amounts of money, usually alumni, there's sometimes an atrium, a street or even a building named after them as a tribute. Then renaming the University of Iowa's College of Public Health to The Wellmark Blue Cross & Blue Shield School of Public Health shouldn't turn too many heads. Right?

The University of Iowa is contemplating whether to rename its College of Public Health after the philanthropic arm of Blue Cross & Blue Shield in exchange for a $15M donation, USA Today reports. This has sparked debate on where universities should draw the line when accepting corporate gifts.

MOST NOTEWORTHY: IBM Corp (IBM), Amazon.com, Inc (AMZN), Hewlett-Packard Co (HPQ), Universal Technical Institute (UTI) and 3Com Corp (COMS) were some of today's noteworthy upgrades:

• Goldman upgraded IBM Corp (NYSE: IBM) to Buy from Neutral to reflect the company's valuation creation moves, as the firm believes IBM's accelerated buyback program and pension expense reduction will be accretive to earnings.

• Despite ThinkEquity's belief that the company was faltering, Amazon.com (NASDAQ: AMZN) customers have grown in size and accelerated their purchases. The upgrade to Accumulate from Source of Funds was based on Amazon.com's increase of market share in core categories.

• AG Edwards upgraded Hewlett Packard (NYSE: HPQ) to Buy from Hold based on higher estimates, continued share gains and the evidence that HPQ has continued its cost cutting abilities.

• BMO Capital upgraded shares of Universal Technical Institute (NYSE: UTI) to Market Perform from Underperform following the company's Q1 results.

• 3Com (NASDAQ: COMS) was upgraded to Hold from Sell at Matrix USA based on the company's improving balance sheet ..

OTHER UPGRADES:

• Jefferies upgraded Lionbridge Technologies (NASDAQ: LIOX) to Buy from Hold.

• Bear Stearns raised Time Warner Telecom Inc (NASDAQ: TWTC) to Outperform from Peer Perform.

• Morgan Keegan upgraded Jones Apparel Group, Inc (NYSE: JNY) to Market Perform from Underperform and Bebe Stores, Inc (NASDAQ: BEBE) to Outperform from Market Perform.

• Prudential upgraded Alcan Inc (NYSE: AL) to Neutral from Underweight.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Analysis provided by Joseph Lazzaro of Theflyonthewall.com:

Now that 3Com (COMS) has purchased the rest of its H3C joint venture in China from Huawei Technologies for $882M, what could be up next for network equipment operator 3Com?

Try being bought-out itself.

It's almost paradoxical to state that a company that recently made a major purchase is a setting itself up to be acquired, but that may very well be the case with 3Com given the increasing amounts of money available in capital markets, and the characteristics unique to this particular potential deal. Sources say potential bidders for 3Com could include established companies, or possibly, although less likely, a private equity player, or possibly a company/private equity combination.

What's generating the deal buzz? A purchase of 3Com may make considerable sense for an existing company operating in/near that space, and that also views 3Com as a suitable fit, both operationally and in terms of market characteristics. Analysts say that 3Com may make sense for a Juniper (JNPR) and Nortel Networks (NT).

Also, previously there were reports that private equity firms were interested in Huawei's H3C stake: a private equity player may be interested in the total 3Com package now, but analysts say the more likely bidder, if one occurs, would come from a publicly listed company.

MOST NOTEWORTHY: Notable companies from today's downgrade list include the New York Stock Exchange (NYX) and Nokia (NOK).

• JP Morgan downgraded the New York Stock Exchange Group Inc. (NYSE:NYX) to Neutral from Overweight based on valuation; they also foresee potential integration issues with Euronext.
• Nokia Corp. (NYSE:NOK) was downgraded to Hold from Add at West LB.

OTHER DOWNGRADES:

• YRC WorldWide Inc. (NASDAQ:YRCW) and Arkansas Best Corp. (NASDAQ:ABFS) were downgraded at Stephens to Underweight from Equal Weight, citing the deteriorating Less-Than-Truckload environment.
• Bear Stearns downgraded 3Com Corporation (NASDAQ:COMS) to Peer Perform from Outperform citing increased execution; Lehman Brothers downgraded 3Coms (COMS) to Underweight from Equal Weight.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

After reaching $100 a share in 2000, it's been mostly torture for shareholders of 3Com as it spiraled lower and lower. But today, the stock got some juice, increasing 12.58% to $5.01.

A report from Bloomberg indicates that the company is a possible takeover target. The theory is that one or more private equity firms will make a bid of $7 per share.

Apparently, the big interest is in 3Com's joint venture with Huawei Technologies Co. This has been a key growth driver.

But, with the recent big buyout deals – such as the takeover of Freescale – there are now a lot of rumors swirling. For the most part, rumors are just that. So, as always: investors beware.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.