Videoconferencing equipment maker,
) is set to release its second-quarter fiscal 2014 results after
the market closes on Jul 23, 2014.
In the last quarter, the company delivered a negative 87.50%
earnings surprise. Meanwhile, the company delivered positive
earnings surprises in three of the last four quarters, with an
average beat of 38.54%. Let's see how things are shaping up for
Factors to be Considered this Quarter
The company continues to show strong signs of improvement as its
Unified Communications Personal Devices segment witnessed solid
global growth. Moreover, Polycom's cost-control policy, which is to
be implemented in fiscal 2014, will improve margins while moving
However, Polycom is facing stiff competition which has compelled it
to adopt a cut-throat pricing strategy. Moreover, after the
acquisition of Norway's Tandberg TV, Cisco has become a major
threat for Polycom. In addition, lower tech spending in the
emerging markets coupled with mergers and acquisitions in the
unified collaborative solutions market may further act as headwinds
for the company while moving ahead.
Our proven model does not conclusively show that Polycom will beat
the Zacks Consensus Estimate this quarter. This is because a stock
needs to have both a positive Earnings ESP and a Zacks Rank #1, #2
or #3 for this to happen. Unfortunately, this is not the case here
as elaborated below. Notably, the Sell-rated stocks (#4 and 5)
should never be considered going into an earnings announcement.
The Earnings ESP, which represents the difference between the Most
Accurate estimate and the Zacks Consensus Estimate, is currently
pegged at 0.00%. This is because both the Most Accurate estimate
and the Zacks Consensus Estimate stand at 14 cents.
Though Polycom's Zacks Rank #3 (Hold) increases the predictive
power of ESP, it makes surprise prediction difficult when combined
with an ESP of 0.00%.
Other Stocks to Consider
Here are some other companies to consider as our model shows
they have the right combination of elements to post an earnings
beat this quarter.
Shenandoah Telecommunications Co.
) has an earnings ESP of +2.50% and a Zacks Rank #1 (Strong
) has an earnings ESP of +1.27% and a Zacks Rank #2 (Buy).
) has an earnings ESP of +1.85% and a Zacks Rank #2.
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