Polycom: travel budgets, green tech driving videoconferencing
Polycom reported solid fourth quarter results, sees a first quarter that's so-so and noted that travel budgets and the need to cut carbon emissions are fueling video conferencing demand.
On Wednesday, Polycom reported fourth quarter earnings of $25.7 million, or 30 cents a share, on revenue of $263 million, a tally that was flat with a year ago (statement). Excluding items, earnings were 42 cents a share, two cents better than Wall Street estimates. For 2008, Polycom revenue was $1.1 billion with earnings of $75.7 million.
Sixty-seven percent of Polycom's revenue comes from video systems and communications. Polycom's lagging business-voice communications-represented 33 percent of the company's fourth quarter revenue.
On a conference call with analysts, Polycom CEO Robert Hagerty said demand still rests with travel costs.
We are finding in practice that enterprise and government agencies alike, consider business travel to be one of the most, if not the most discretionary budget line item. In fact, organizations of all sizes appear to be essentially eliminating inter-company travel and significantly reducing the number and frequency of individuals traveling for customer facing meetings.
Our solutions not only decrease the out-of-pocket cost of travel, but also substantially reduce the opportunity cost of travel, in other words a two-hour meeting takes two hours not two days....Another critical driver is the green agenda including various mandates to reduce carbon emissions over prescribed periods in certain geographies particularly Europe. Clearly another benefit of air, train, and car travel reduction is the favorable environmental impact. This is becoming a priority for the North American market as well.
While the ROI case for video conferencing and telepresence systems has always been travel, the green tech reason is relatively new.
Source: www.blogs.zdnet.com
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