Polycom Shares Got Destroyed: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of videoconferencing guru Polycom (NAS: PLCM) are getting destroyed today, down by as much as a third at the low, after the company reported third-quarter earnings last night short of estimates.

So what: Third-quarter revenue was $379 million, which, although it showed a 23% increase, fell short of the $388.3 million that the Street was looking for. Adjusted earnings per share also came in below forecast, at $0.26 per share compared to the $0.27 consensus estimate.

Now what: The company experienced lower year-over-year revenue growth in its important enterprise customer segment. Fears that rival Cisco (NAS: CSCO) has been stealing share with its videoconferencing offers are also weighing on investors. Microsoft (NAS: MSFT) also recently closed its acquisition of Skype, adding to the competitive fodder. Polycom is certainly running into some headwinds, and I'm not so sure it can overcome them.

Interested in more info on Polycom? Add it to your watchlist byclicking here.

At the time thisarticle was published Fool contributorEvan Niuholds no position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool owns shares of Cisco Systems and Microsoft.Motley Fool newsletter serviceshave recommended buying shares of Polycom, Cisco Systems, and Microsoft.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Microsoft. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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