Polycom (PLCM) shares are trading sharply lower on signs that business is slowing for the video and audio conferencing equipment company.
This morning, Stifel Nicolaus analyst Sanjiv Wadhwani noted that checks find Polycom is aggressively discounting its entry-level video conferencing system to better compete with privately held LifeSize. He also writes that large deals in video conferencing are taking longer to close, with customers requiring multiple levels of approval. “Checks with resellers show that the month of November was quite slow, with sales down from October. He says the voice side has been “equally negative if not worse.”
Wadhwani today cut his ‘08 EPS estimate to $1.42, from $1.44; for ‘09 he goes to $1.44, from $1.54. He maintains a Hold rating on the stock.
Yesterday, the company gave a presentation at the Barclays Capital technology conference in San Francisco; in a research note this morning, Barclays wireless analyst Jeff Kvaal notes that the company made mention of some slowing in video and “particularly voice.”
Earlier in the week, Piper Jaffray analyst Troy Jensen cut his ‘08 estimate to $1.44 from $1.45, and trimmed ‘09 to $1.50 form $1.64, noting that channel checks indicate “widespread weakness across various product segments.” He noted particular weakness in both VoIP products and in video conferencing. Jensen maintains a Buy rating on the shares, but cut his target to $21, from $26.
Companies are now realizing to save money video conferencing is now a reality, increased bandwitdth up to a T3 is a must however.
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