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Polycom (PLCM) Beats on Q4 Earnings, Revenues In Line - Analyst Blog

Zacks Equity Research
Updated

Polycom Inc. (PLCM) posted financial results for the fourth quarter of 2014. GAAP net income came in at $20.5 million or 15 cents per share compared with a loss of $2 million or 1 cent per share in the prior-year quarter. The company posted quarterly adjusted (including stock based comp. exp) earnings per share of 17 cents which was above the Zacks Consensus Estimate of 15 cents.
 
Quarterly total revenue increased 0.3% year over year to $349 million, and was in line with the Zacks Consensus Estimate. Product revenues were $252.6 million, up 1% year over year. Service revenues totaled $96.3 million, down 1% from the prior-year quarter.

Polycom Inc. - Quarterly EPS | FindTheBest

Technological Distribution of Sales

UC Group Systems revenues totaled $219.2 million, up 1% year over year. UC Personal Devices revenues reached $66.6 million, up 7% from the year-ago quarter. UC Platform (Network Infrastructure) revenues came in at $63.1 million, down 7% year over year.

Geographic Distribution of Sales

The Americas (North and South) generated approximately $165.3 million in revenues, down 3% year over year. Europe, the Middle East and Africa recorded $93.7 million, up 5% year over year. The Asia-Pacific region accounted for the remaining $89.9 million, up 2% year over year.

Margins

Gross margin (on a reported basis) in the reported quarter stood at 57.6% compared with 56.6% in the year-ago quarter. Quarterly operating expenses (on a reported basis) were $178.9 million, down 9.4% year over year. Quarterly operating income (on a reported basis) was $22.2 million compared with a loss of $0.4 million in the prior-year quarter.

Balance Sheet

At the end of the fourth quarter of 2014, Polycom had nearly $628.9 million of cash and short-term investments on its balance sheet compared with $527.3 million at the end of 2013. The total debt stood at $235.9 million as against $242.2 million at the end of 2013. The debt-to-capitalization ratio was 0.19 at the end of the fourth quarter of 2014 as compared with 0.20 at the end of 2013.

Cash Flow

Cash flow from operations, at the end of the 2014, was $205.4 million against $168.4 million at the end of 2013. Free cash flow in the reported quarter was $155.3 million compared with $115.4 million in the same period last year.

Other Stocks to Consider

Polycom currently has a Zacks Rank #3 (Hold). Other better-ranked stocks in the Wireless Equipment industry include InterDigital, Inc. (IDCC), Aruba Networks, Inc. (ARUN) and Nokia Corp. (NOK). InterDigital sports a Zacks Rank #1 (Strong Buy) while the other two stocks hold a Zacks Rank #2 (Buy).


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