Published in News
Polycom earnings beat forecasts
by David Stellmack on07 January 2009
Job cuts help stock price
Polycom, Inc. one of two leading manufacturers of video conferencing systems and products, announced that its fourth quarter earnings were higher than expected by market analysts, since it had expected its revenue to basically be flat.
Despite the sunny news of increased earnings, Polycom said that it laid off six percent of its workforce (150 jobs) to reduce its costs. The job cuts were immediate and Polycom announced that it would also take a charge of nearly $6.5 million in Q1 of 2009. After the workforce reduction announcement shares of Polycom rose by eight percent and Q4 earnings of 29 cents to 31 cents per share are expected.
However, Polycom cut its revenue forecast due to a continued weakness in its voice communications business. It now expects revenue to fall to between $263 million to $265 million in Q4 that ended December 31, 2008. Analysts predicted earnings of 35 cents per share on revenue of $271.5 million, according to Reuters Estimates.