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Demand for Unified Communications Pushes Polycom to Growth Path

October 28, 2013

A recent survey of more than 1,200 business decision makers, conducted by Redshift Research and commissioned by Unified Communications and collaborations (UC&C) company Polycom, shows that video conferencing is gaining momentum in the business world. It is becoming an essential tool to improve team collaboration while closing the physical and cultural gap between colleagues doing business across distances.

The survey shows that nearly 96 percent of business decision makers believe video conferencing removes distance barriers and improves productivity between teams in different cities and countries. The survey found that video is becoming more pervasive in businesses across the globe. When asked to choose their preferred methods of communications today, respondents ranked video conferencing third (47 percent) after e-mail (89 percent) and voice/conference calls (64 percent).

The same business leaders and managers expect video to be their most preferred collaboration tool in next three years (52 percent), followed by e-mail (51 percent) and voice/conference calls (37 percent). The survey shows that about 76 percent of respondents are using video conferencing at work today.

According to the same respondents, three biggest advantages of video conferencing are better collaboration between globally dispersed colleagues (54 percent), greater clarity of topics being discussed (45 percent) and more efficient meetings (44 percent).

Polycom is certainly benefitting from this trend, which is reflected in the company’s third quarter financial results, which were reported last week. The 3Q, which ended September 30, 2013, reported net revenues of $336 million, non-GAAP net income of $19 million and non-GAAP earnings per diluted share of 11 cents.

In a statement, Kevin Parker, Polycom's chairman and interim CEO, said, "Polycom's financial performance in Q3 was on target with our expectations, driven by our U.S. Enterprise and voice related businesses, partially offset by a more challenging quarter in Asia Pacific." "We continue to prioritize those areas of the business that maximize growth, while also pursuing opportunities to reduce expenses and drive expanded profitability," added Parker.

Consequently, reports indicate that many analysts have recently upgraded Polycom shares. For example, analysts at Raymond James upgraded shares of Polycom from a "market perform" rating to an "outperform" rating in a research note to investors. However, there are others at Zacks who have reiterated a "neutral" rating on shares of Polycom in a research note to investors.

Edited by Ryan Sartor

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