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Videoconferencing equipment maker, Polycom Inc. (PLCM - Analyst Report) is set to release its second-quarter fiscal 2014 results after the market closes on Jul 23, 2014.

In the last quarter, the company delivered a negative 87.50% earnings surprise. Meanwhile, the company delivered positive earnings surprises in three of the last four quarters, with an average beat of 38.54%. Let’s see how things are shaping up for this announcement.

Factors to be Considered this Quarter

The company continues to show strong signs of improvement as its Unified Communications Personal Devices segment witnessed solid global growth. Moreover, Polycom’s cost-control policy, which is to be implemented in fiscal 2014, will improve margins while moving ahead.

However, Polycom is facing stiff competition which has compelled it to adopt a cut-throat pricing strategy. Moreover, after the acquisition of Norway’s Tandberg TV, Cisco has become a major threat for Polycom. In addition, lower tech spending in the emerging markets coupled with mergers and acquisitions in the unified collaborative solutions market may further act as headwinds for the company while moving ahead.

Earnings Whispers

Our proven model does not conclusively show that Polycom will beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, #2 or #3 for this to happen. Unfortunately, this is not the case here as elaborated below. Notably, the Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.  

Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is currently pegged at 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 14 cents.

Zacks Rank: Though Polycom’s Zacks Rank #3 (Hold) increases the predictive power of ESP, it makes surprise prediction difficult when combined with an ESP of 0.00%.

Other Stocks to Consider

Here are some other companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter.

Shenandoah Telecommunications Co. (SHEN - Snapshot Report) has an earnings ESP of +2.50% and a Zacks Rank #1 (Strong Buy).

BCE Inc. (BCE - Analyst Report) has an earnings ESP of +1.27% and a Zacks Rank #2 (Buy).

TELUS Corporation (TU - Analyst Report) has an earnings ESP of +1.85% and a Zacks Rank #2.

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