Shares of videoconferencing specialist Polycom
Perhaps spooked by Polycom's rapid rise to 10-year highs, including a three-month gain of more than 41%, investors dropped the share price by 6.4% on Thursday in preparation for the fourth-quarter earnings report.
Boy, was that a bad bet. Polycom proceeded to crush every estimate and send the stock back to fresh decade-high prices. It's up by 13% in midday trading.
Non-GAAP earnings per share jumped by 48% year over year to $0.49, on 27% stronger sales. In both cases, these results left even the highest analyst targets far behind. Management pointed to particularly strong growth in Russia, China, India, and Australia, although sales were strong across all geographies and product categories.
The company plans to support the Asian growth momentum with "a few targeted investments" in coming quarters. Polycom is pushing its Unified Communications Everywhere to sales channels and partners across the globe, and the solution is obviously in high demand.
Polycom is also working its video solutions into tablet computers, partnering with every major tablet designer from Apple
Against archrival Cisco Systems
Polycom's success puzzle has many pieces, all adding up to a highly specialized small-cap business that's competing successfully against giant Cisco in a red-hot market. This winning Rule Breaker surely belongs on your Foolish watchlist, if nothing else. You can also join me in placing an "outperform" call on Polycom in our CAPS system. Either way, you'll get a ringside seat to the company's future challenges and wins.
Polycom is a Motley Fool Rule Breakers pick. Apple is a Motley Fool Stock Advisorrecommendation. The Fool has written puts on Apple. The Fool has created a bull call spread position on Cisco Systems. The Fool owns shares of Apple. Motley Fool Alpha owns shares of Cisco Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.