(Reuters) - Videoconferencing company Polycom Inc PLCM.O lowered its first-quarter revenue outlook and projected a profit well below expectations, hurt mainly by slower business in North America.
The company’s shares were trading down 18 percent before the bell.
“The growth rate (in the quarter) was below our overall expectations, driven primarily by shortfalls in Asia Pacific and North America,” Chief Executive Andy Andrew Miller said in a statement.
“Polycom’s current operating model assumes a higher level of revenue growth and we will analyze our assumptions between now and our regularly scheduled call on April 18,” he added.
In January, Polycom, which competes with Cisco Systems Inc (CSCO.O), warned that it was seeing some delay in closing deals, with several closures slipping into 2012.
In a brief call with analysts on Thursday, CEO Miller said he does not see any major deals moving from the first quarter into the second.
Polycom had been much better placed toward the beginning of 2011 as Cisco struggled with a business that had grown too big and unwieldy over the years.
However, it is now feeling the heat again, with the tech giant back on track after a restructuring which has it focusing on its video business.
Polycom, which recently hired Electronic Arts Inc’s (EA.O) Eric Brown in place of long time CFO Michael Kourey, expects a profit of 21 cents to 23 cents, excluding items, on revenue of $364 million to $370 million in the first quarter.
In January, the company had said its revenue would drop 2 percent in the first quarter from the fourth quarter of 2011, suggesting a number of around $399 million.
Analysts too were looking for an adjusted profit of 30 cents a share on revenue of $399.7 million, according to Thomson Reuters I/B/E/S.
The company’s shares fell to $14.90 in trading before the bell, after closing at $18.19 on Wednesday.
Polycom shares, which rose 19 percent the day after the company smashed fourth-quarter profit expectations, have since given up all the gains.
They have also nearly halved in value since hitting a year-high of $34.30 on July 7, 2011.
Reporting by Sayantani Ghosh in Bangalore; Editing by Sreejiraj Eluvangal