Aug. 5 (Bloomberg) -- 3Com Corp., the network equipment maker whose takeover by Bain Capital LLC collapsed this year, raised its first-quarter sales and profit forecasts amid gains in China.

The stock advanced the most in more than five months in Nasdaq trading after 3Com said sales in the period ending Aug. 29 will be at least $335 million, compared with as much as $330 million forecast in June.

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

``H3C is the crown jewel of the company,'' Kaufman Brothers LP's Manuel Recarey said in an interview. Some investors were concerned that Huawei would stop buying gear from 3Com since it no longer owns H3C, he said. The New York-based analyst has a hold rating on the stock and doesn't own any.

Earnings will be 6 cents to 8 cents a share, excluding gains from a legal settlement and some costs, 3Com said in a statement today. The company had predicted earnings of 3 cents to 5 cents in June. Recarey had estimated profit of 4 cents.

The stock climbed 20 cents, or 11 percent, to $2.06 at 4 p.m. New York time on the Nasdaq Stock Market. The gain was the largest since Feb. 29. The Marlborough, Massachusetts-based company has plunged 54 percent this year.

In March, Bain and Huawei walked away from a $2.2 billion takeover bid for 3Com after failing to ease the U.S. government's concern that the transaction may threaten national security.

Earnings Forecast

First-quarter sales in China will be 10 percent higher than in the fourth quarter, mainly because of increased sales to Huawei, 3Com said. Spokesman Kevin Flanagan declined to comment beyond the statement. 3Com plans to report results for the quarter in September.

Last month, 3Com settled a patent dispute with Realtek Semiconductor Corp., which agreed to pay $70 million for the right to use two networking technologies.

To contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net

Last Updated: August 5, 2008 16:07 EDT