Polycom Inc : Polycom 4Q Profit Jumps 50%, Topping Expectations
01/23/2012| 04:40pm US/Eastern
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Polycom Inc.'s (PLCM) fourth-quarter earnings rose a greater-than-expected 50% as the videoconferencing company's emerging-market sales continued to outperform its American business.
Shares jumped 4.9% to $19.32 after hours Monday as revenue also topped expectations. The stock had slid in recent months since hitting a 10-year high of $34.30 in July.
Polycom's revenue growth, though sharp, has eased in recent quarters after some American enterprise customers dialed back new orders. The company, which offers products ranging from video server software to immersive telepresence suites, has responded to the softer revenue growth by shifting some of its sales force and hiring executives from rival Cisco Corp. (CSCO).
Polycom still benefits from strong Asia-Pacific sales, which grew 42% in the latest quarter, as well as healthy business from the federal government in the U.S.
Meanwhile, the company is working to grow its mobile offerings. Polycom last year launched a high-definition video software program for media tablets and later acquired a privately held company, Vivu Inc., that develops software for web-based HD video collaboration.
Polycom also bought Hewlett-Packard Co.'s (HPQ) videoconference business last year, a deal that added to its high-end offerings with an immersive telepresence system aimed at recreating the feeling of face-to-face meetings.
In the latest quarter, Polycom posted a profit of $49.6 million, or 28 cents a share, up from $33.1 million, or 19 cents a share, a year earlier. Excluding stock-based compensation costs, write-downs and other one-time items, per-share earnings jumped to 41 cents from 24 cents. Analysts polled by Thomson Reuters predicted earnings of 29 cents a share.
The per-share figures were adjusted to reflect a two-for-one stock split effected in July.
Revenue rose 20% to $407 million. The company's downbeat October guidance called for sequential revenue growth between 5% and 6%, or $398 million to $401.8 million.
Gross margin widened to 60% from 59.8%.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com
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