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.
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At the time this article 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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