On Aug 25, 2014, we issued an updated research report on
). The company shows strong signs of improvement as its Unified
Communications Personal Devices segment reported solid global
Polycom has delivered positive earnings surprises in two
quarters last year, with an average beat of 32.59%. Meanwhile, the
company reported disappointing financial results for the second
quarter of 2014 with both the top and the bottom line missing the
Zacks Consensus Estimate.
Polycom's RealPresence platform is gaining considerable
popularity. The company supplied 12,500 desktop corporate phones to
cloud-based voice over IP in Unified Communications Provider, Jive
communication in the reported quarter.
In the meantime, Polycom is focusing on streamlining its cost
structure by reducing headcounts, in order to improve margins, and
realigning and reinvesting resources in strategic growth areas.
Further, Polycom entered into a strategic agreement with AT&T
) to offer cloud-based video conferencing services to different
organizations. Moreover, Polycom's newly-launched Group Series
video products are gaining significant market traction and have
already contributed 43% of the total group video revenue in the
reported quarter, highlighting year-over-year growth of 36%.
However, management believes that sales in Europe will remain
under pressure in the third quarter of 2014 mainly due to the
recent tension between Russia and Ukraine. Adding to the woes, the
global economy is currently far below its pre-recession level. This
may lead to longer approval cycles for new projects and
uncertainties shrouding actual program implementations at customer
Meanwhile, the uniform collaborative communications market is
becoming fiercely competitive, resulting in a cut-throat pricing
strategy. After the acquisition of Norway's Tandberg TV, Cisco
Systems, Inc. (
) has become a major competitor of Polycom.
Polycom currently carries a Zacks Rank #3 (Hold). Another stock
worth considering in this sector is DragonWave Inc. (
) with a Zacks Rank #2 (Buy).
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