DJ Poly Stock Soars 25% on Soaring Demand for Headsets and Video Gear -- Barrons.com
Shares of headset and conference room hardware maker Poly were jumping more than 25% Friday morning on better-than-forecast results for the company's fiscal third quarter ended Dec. 26.
For the quarter, Poly (ticker: PLT) -- the company's official corporate name is still Plantronics, although it no longer uses it -- had revenue of $485 million, up 26% from a year ago and well ahead of the company's guidance range of $417 million to $447 million. Non-GAAP profits were $1.47 a share, likewise above the guidance range of 85 cents to $1.05 a share. The company reported results late Thursday.
For the fiscal fourth quarter, Poly sees revenue of $438 million to $468 million and non-GAAP profits of 80 cents to $1 a share, which tops the previous consensus estimates of $415.3 million and 83 cents a share.
In an interview with Barron's, Poly CEO Dave Shull said the company saw "record-setting demand" for both headsets and video products, driven by the pandemic-triggered work-from-home trend. He notes that headset sales were up 74% in the quarter, while video hardware products were up 60%. That was offset in part by a down quarter for services, a decline in desktop phone sales with most offices closed, and a strategic decision to stop selling headsets for videogaming applications.
Shull says Poly is seeing growing demand for "video bars" used to turn small "huddle" rooms and home offices into videoconferencing facilities. He says that less than 10% of an addressable market of 50 million conference rooms are currently equipped for video. Shull notes that the company's headset business has been shifting away from its traditional call-center business toward headsets used by office workers both at home and at their office desks.
While Shull notes that Poly has gotten a boost from the work-from-home trend, he also concedes that the company has been slow to expand sales to online retail channels, with most sales traditionally coming through integrators and resellers. He says that "the competition has been outselling us like crazy on Amazon," an issue he says Poly is trying to fix.
Shull thinks that we aren't far off from a "new normal" for office work, which he thinks will involve "50% of the people being in the office 50% of the time," with the rest continuing to work remotely. He says as CEO he'll never have an office again and will need workstations to be able to recognize him -- and to sync to his connectivity and communications needs.
He adds that he thinks Poly's phone business will bounce back post-Covid, but not to pre-pandemic levels. But he sees growing demand for desktop speakers that can connect with mobile phones, and provide high quality audio for calls on Teams, Zoom and other conferencing applications.
In recent trading, Poly shares were rallying 25.8%, at $44.20.
Write to Eric J. Savitz at email@example.com
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February 05, 2021 10:04 ET (15:04 GMT)
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