3Com Corp. (COMS) swung to a fiscal fourth-quarter profit, but a slowdown in the Chinese and European markets weighed on its forecast for the next quarter.

The Marlborough, Mass., company is attempting to refocus itself back on the U.S. market for network equipment, but its core overseas businesses continue to struggle. In particular, the wind-down of its partnership with Chinese vendor Huawei Technologies Co. (HWI.YY) has resulted in a surprisingly fast deterioration of sales in the region.

For the first quarter, 3Com expects to post revenue of $270 million to $280 million, below the $301 million analysts were expecting. Much of that shortfall stems from Huawei.

"That's a meaningful decline for their whole business," said Jeff Evenson, an analyst for Sanford C. Bernstein & Co. LLC.

3Com shares fell 12.9% to $4.09 in recent trading.

The estimate overshadowed decent fourth-quarter results. 3Com posted net income of $20.2 million, or 5 cents a share, compared with a year-ago loss of $166.7 million, or 41 cents a share. Excluding one-time charges and stock-compensation costs, earnings rose to 10 cents a share. Comparisons were helped by a goodwill charge taken a year ago.

Revenue fell 8.2% to $295.1 million.

Analysts, on average, forecast earnings of 5 cents a share and $295 million in revenue. The company had projected per-share earnings of 4 cents to 6 cents and revenue of $290 million to $300 million in March.

The networking-equipment company has been cutting costs as it focuses on revenue growth, improving margins and reducing debt.

3Com sells antihacking and other network-security services to the U.S. Defense Department. That business line ultimately sank its proposed $2.2 billion buyout last year by Huawei and private-equity firm Bain Capital Partners LLC. Two-thirds of 3Com's 6,000 employees work in Beijing.

Surprisingly, the U.S. business improved sequentially in the fourth quarter. Analysts seemed generally upbeat about the company's strategy to attack the U.S. switching business, which it cut back in the late 1990s to sell to the Chinese market.

"Clearly they're positioning themselves as a serious low-cost alternative in the enterprise market, given the current constrained IT spending environment," said Greg Mesniaeff, an analyst at Needham & Co. "Their strategy is clearing getting some traction."

3Com, however, faces stiff competition, including networking titan Cisco Systems Inc. (CSCO) and Juniper Networks Inc. (JNPR). The company itself calls fiscal 2010, "a year of transition."

-By Roger Cheng, Dow Jones Newswires; 212-416-2153; roger.cheng@dowjones.com

(Kerry Grace Benn contributed to this report.)