Polycom Quarterly Profit Slips

Revenue rises.
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Polycom

(PLCM)

, the Pleasanton, Calif.-based communications equipment provider, said its first-quarter earnings fell 14.6% from the year-ago period, on expenses related to stock options and other charges.

The company earned $14.0 million, or 16 cents a share, in the quarter, compared with $16.4 million, or 16 cents a share, a year ago. Adjusted for items, earnings were $19.8 million, or 22 cents a share in the most recent quarter. On that basis analysts surveyed by Thomson First Call were expecting earnings of $17.6 million, or 20 cents a share in the most recent quarter.

First-quarter revenue rose 14.7% from a year ago to $157.7 million. Analysts were expecting revenue of $151.8 million in the most recent quarter.

"During the first quarter, Polycom continued to benefit from voice and video over IP adoption," the company said. "Against this backdrop of rising IP connectivity, Polycom is continuing to invest in product integration and go-to-market programs with our strategic partners.''

''The ease of use of our integrated collaborative communications solution is at a level that we believe is unparalleled, and we are pleased that our customers are adopting Polycom's integrated solution at the highest levels thus far," the company said. ''Polycom's backlog of $34.5 million is up 44 percent year over year while deferred revenue jumped 55 percent to $57.5 million. During the first quarter, we purchased an additional $52 million in Polycom common stock and exited the quarter with a remaining $67 million authorization under the current share repurchase program."

First-quarter gross profit rose 12.4% from a year ago to $97.2 million, though the gross margin fell 127 basis points to 61.6%. Operating income fell 12.2% from a year ago to $17.2 million and operating margin fell 335 basis points to 10.9%.

By segment, first-quarter revenue from products segment rose 13.6% from a year ago to $138.7 million and revenue from services segment rose 23.4% to $19.0 million.

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