Friday, October 06, 2006

Calls of Note Part 4

Piper Jaffray raising estimates and price tgt on Polycom (NADSAQ:PLCM) on strong demand in voice and video. Firm believes Polycom closed out a solid quarter with strong demand for video endpoints and IP phones more than offsetting modestly disappointing Federal and Network Infrastructure demand. Firm's checks with video conferencing distributors and value-added resellers revealed surprisingly favorable results in North America (56% of sales in Q2) and most of their contacts were also upbeat with respect to Q4 demand.

Given the favorable feedback firm picked up from their channel contacts, they believe Polycom will be able to exceed Q3 consensus revenue and EPS estimates, grow backlog on a sequential basis and guide above the current consensus estimates for Q4.

Firm believes Polycom will be introducing a High Definition video conferencing system within the next month and feedback regarding the quality of this new system has been exceptionally good. They also believe Polycom will be introducing a new IP only MCU relatively soon and anticipate this new video bridge will help the company regain growth in its infrastructure business. Firm anticipates these two new products and the recently introduced HD phones and Skype certified speaker phone will gain traction in 2007 and could provide an incremental boost to the company's growth rate.

Notablecalls: Beat and raise sounds good, but that's what the mkt is expecting from Polycom. Not actionable, but good to know.

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