Polycom Beats Expectations But Takes A Step Back Anyway

Polycom (Nasdaq: PLCM  ) reported earnings on Jan. 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Polycom met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped and GAAP earnings per share contracted significantly.

Margins shrank across the board.

Revenue details
Polycom reported revenue of $353.0 million. The 15 analysts polled by S&P Capital IQ predicted revenue of $350.7 million on the same basis. GAAP reported sales were 13% lower than the prior-year quarter's $407.0 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.17. The 16 earnings estimates compiled by S&P Capital IQ predicted $0.15 per share. GAAP EPS of $0.01 for Q4 were 96% lower than the prior-year quarter's $0.28 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 58.6%, 140 basis points worse than the prior-year quarter. Operating margin was 2.0%, 1,080 basis points worse than the prior-year quarter. Net margin was 0.6%, 1,160 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $340.4 million. On the bottom line, the average EPS estimate is $0.14.

Next year's average estimate for revenue is $1.45 billion. The average EPS estimate is $0.70.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 201 members out of 222 rating the stock outperform, and 21 members rating it underperform. Among 65 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 59 give Polycom a green thumbs-up, and six give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Polycom is hold, with an average price target of $10.58.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. TMFDisclosureHere


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