Radvision lowers guidance, blames Cisco again, as Q2 comes up short

Videoconferencing infrastructure provider Radvision lowered its outlook for the second quarter of 2011, noting its business in North America has not performed to plan. It was the second straight quarter that the company lowered its guidance.

The Israel-based company reset revenue predictions for the quarter to between $18 million and $18.5 million, predicting a net loss for the quarter of between 41 cents and 44 cents per diluted share. Radvision initially forecast revenue of $22 million for the quarter and a net loss of 17 cents per diluted share.

The company said is Video Business Unit expects revenues of $14.5 million to $15 million, including $1.5 million from Cisco, in line with expectations but a far cry from the $9.5 million of revenue from Cisco in the second quarter of 2010.

"While we knew the second quarter would be challenging because of the anticipated substantial drop in Cisco revenues from the second quarter last year, the quarter was more difficult than expected," said Boaz Raviv, Radvision's chief executive. "While our revenues in EMEA, APAC and CALA continued to grow year-over-year, revenues in our VBU in North America did not meet our plan."

Radvision is in the midst of a transition of sorts, becoming an end-to-end video conferencing provider.

In April, the company shaved $3 million from its first quarter revenue projection, saying it had expected Cisco revenues to decline progressively each quarter after Cisco purchased of Tandberg, but "the decline in the first quarter of 2011 was much steeper than expected." Before the Tandberg acquisition, Cisco resold Radvision conferencing systems; that part of the business made up about 40 percent of Radvision's revenues.

In the first quarter, Radvision saw strong growth in its VBU, recording a revenue bump of some 55 percent from the previous year.

But Raviv said it is taking longer than anticipated to gain traction in North America.

"Getting back on track with our plan is our priority," Raviv said. "We have overcome challenges in the past and we are taking all necessary actions to ensure we return to growth company-wide as quickly as possible."

The company will report final second quarter earnings Aug. 2, and will hold a conference call at 9 a.m. Eastern. (Dial-in: 1-877-601-3546 or +1-210-839-8500 (International dialers; Passcode: "RADVISION")

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