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Polycom (PLCM) Down after Lowering Outlook

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Shares of Polycom Inc. (NASDAQ:PLCM) are plunging over 17% in morning trade after the company lowered its profit sales outlook for its fiscal first quarter well below analyst forecasts.

Polycom (PLCM) the global leader in open standards-based unified communications (UC) said it now expects to report net revenues for the quarter ended March 31, 2012, in the range of $364 million to $370 million, compared with net revenues of $344 million in the first quarter of 2011. This is significantly lower than analyst consensus forecasts of $400 million.

The Company expects to report adjusted earnings of $0.21 to $0.23 per share compared to adjusted earnings of $0.24 per share in the comparable period a year ago. This is also well below analyst forecasts that called for $0.30 per share in earnings. The company cited low growth in its Asia Pacific and North American markets for the shortfall.


“We estimate that we grew quarterly revenues approximately 7 percent year-over-year, with each region recording increases. However, the growth rate was below our overall expectations, driven primarily by shortfalls in Asia Pacific and North America,” said Andrew Miller, President and CEO. “Polycom’s current operating model assumes a higher level of revenue growth, and we will analyze our assumptions between now and our regularly scheduled call on April 18th.”

“Polycom (PLCM) announced a pretty big miss for the March quarter,” said Tim Long, an analyst at BMO Capital Markets in New York, in a report today. “Investors are concerned about execution and increased competition.”

UBS analyst Jack Monti however suggested Polycom shares are on sale and that the company is a leader in the UC Communications space. The analyst adds that demand is bottoming and that the company continues to be a potential acquisition target. Shares are still rated a BUY.

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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