Sequential decoding with ARQ (automatic-repeat-request) and code combining under the timeout condition is considered. That is, whenever the decoding time of a given packet exceeds some predetermined duration, decoding is stopped and retransmission of the packet is requested. However, the unsuccessful packets are not discarded, but are combined with their retransmitted copies. It is shown that the use of code combining allows sequential decoding to operate efficiently even when the coding rate R exceeds the computational cutoff rate R/sub comp/. Furthermore, an analysis of the selective-repeat ARQ scheme shows that the use of code combining yields a significant throughput even at very high channel error rates, thus making the system very robust under severe degradations of the channel. >