Polycom beats Wall Street revenue, earnings estimates in Q1

Predicting that the Unified Communications industry was at an inflection point, Polycom (NASDAQ:PLCM) beat analyst estimates for first quarter earnings, reporting after market close on Thursday that net income soared nearly sevenfold to $34 million, or 38 cents per share, from $5 million, or 6 cents per share a year ago. Adjuster earnings were 48 cents per share; that beat the 42 cents analysts expected.

The Pleasanton, Calif-based company also reported revenue beat Wall Street expectations, coming in at a company-record $344 million for the quarter, up from $276 million last year, and above the $337 million analysts forecast.

The teleconferencing system maker said sales were driven by the increasing aggressive uptake of video conferencing by enterprises, as well as increased use of mobile devices and the evolution of cloud computing.

"We believe the UC industry is at an inflection point and we are uniquely positioned to benefit directly from the fundamental shift in the way people communicate," said president and CEO Andrew Miller. "The rapid adoption of video, the pervasive use of mobile devices, and the emerging use of the cloud to deliver UC solutions are driving our strategy as principal catalysts for our business.

"As the only independent provider of scale, we believe Polycom is in an excellent position to capture this momentum and deliver strong revenue growth and expanding operating margins in the future.

Miller said sales for Polycom's UC solutions were strong across all major geographies.

"We are particularly pleased with the traction Polycom's UC strategy is gaining within our partner and customer communities, as well as the outstanding results we continue to achieve in emerging markets such as China and India," said Miller.

Miller also said Polycom's strategy was focusing on new products and partnerships, singling out its recent acquisition of the Accordent video content management solution, which allowed it to offer a cloud-based media service hosted on Microsoft's Windows Azure platform, as one example of the success of its strategic initiatives.

The market has taken notice.

Piper Jaffray said Polycom would benefit from Cisco's foundering, which "has frustrated a significant number of video resellers and will likely lead to market share gains for Polycom in the first quarter, but more importantly, mind share gains with channel partners and the likelihood of better performance throughout 2011. We are reiterating our Overweight rating on PLCM shares and raising our price target to $64."

For more:
- see this release

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