Polycom Revenues Up, Profit Down

Beating Wall Street estimates, IP phone and videoconferencing vendor Polycom delivered earnings that showed strong growth in both its voice and video businesses. Profits, however, fell 18 percent, to $12.6 million, from the same period a year ago due to higher overhead costs.

Thursdays earnings report was the first under Andrew Miller, Polycoms new CEO, who took over the top spot in May. Miller is the former CEO of TANDBERG, the videoconferencing rival that was acquired last fall by Cisco.

“We generated record revenues and growth accelerated in the second quarter, which I believe validates Polycom’s strategic investments and confirms that our go-to-market strategy and innovative solutions are aligned with our customers and partners,” said Miller in a statement.

Driven by widening adoption of VoIP and videoconferencing, the company enjoyed 42-percent growth in its voice communications unit and 21-percent growth at its video solutions business. Total revenue climbed 28 percent, to $294.6 million, higher than the companys projection of around $287.2 million.

Earlier this week, Polycom said at the Microsoft Worldwide Partner Conference 2010 that it will partner with BT to deliver an end-to-end UC service built around the MS Office Communications Server. The BT relationship marks the latest in a series of ambitious hookups for Polycom, which, since Cisco announced the TANDBERG acquisition, has faced a dominant player in its core business. Like others in the videoconferencing sector, Polycom is scrambling to devise a strategy to promote interoperability with the Cisco lines and to carve out a sustainable niche in the market that includes its IP deskphones, its videoconferencing and telepresence systems, and its unified communications offerings.

In the last year, Polycom has announced a series of partnerships with companies including IBM, HP, Avaya, Juniper Networks Inc., Siemens Enterprise Communications, and BroadSoft. Polycoms shares have risen 40 percent since the end of January.

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