Earnings Preview: Polycom

Jul.16.08 | About: Polycom, Inc. (PLCM)

Polycom (NASDAQ:PLCM) is expected to report Q2 earnings after market close on Wednesday, July 16, with a conference call scheduled for 5:00 pm ET.


The consensus estimate is 36c for EPS and $265.47M for revenue, according to First Call. Management's most recent guidance calls for revenues of $264M to $267M. Tandberg (OTC:TADBF), the leading video conferencing vendor worldwide and competitor to Polycom, reported Q2 results that were encouraging considering the state of the economy, which should bode well for Polycom.

Analyst Views

Wedbush expects Polycom to report good Q2 results and a positive outlook for Q3. The firm expects revenue to be in line with its expectations of $265M and EPS to be in line with its 36c estimate, or slightly better than expected. Wedbush expects revenue growth to be driven by international and video revenue, which should be offset by some softness in domestic and voice revenue. While Wedbush expects management to maintain a conservative tone for Q3 and FY08 given the macro environment, the firm expects the outlook for video growth to remain positive. Wedbush anticipates the international markets to remain strong for Polycom. That said, the firm has some concerns given the bookings deceleration in Q1 and modest downtick in deferred product revenue. Wedbush also believes Polycom still needs to improve its channel relationships versus its peers.