First Albany Cuts Polycom

Analyst Randall Scherago says the communications equipment manufacturer had weaker-than-expected business in its Enterprise, U.S. government, and Asian operations

First Albany cuts Polycom Inc. (PLCM ) to neutral.

Analyst Randall Scherago says he is downgrading from buy as the company's first-quarter forecast falls short of his $142.5 million revenue and 18 cents earnings per share estimates. The Street's consensus estimates of $142.6 million in revenue and 19 cents earnings per share.

He says the company guided fourth-quarter reveneus lower due to weaker-than-expected business in its Enterprise division as well as U.S. government segments, and Asian operations. He notes management characterized first-quarter sales as weak in January and February and strong in March.

Scherago cuts his 2005 revenue and earnings per share estimates to $580 million and 72 cents from $610 million and 89 cents. He suspends his 2006 estimates until earnings per share visibility and consistency return. He thinks Polycom could be stuck in a $14 to $18 trading range for 3 to 6 months.

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