Poly Wobbles, Plantronics Consumer Business A Basket Case, Gaming Business Sold
Poly the owners of the Plantronics headphone brand have moved to cut back their exposure to the consumer market with some analysts tipping that the Company could exit the consumer market all together as revenues fall and losses mount, the Company has already moved to sell off their gaming headphone business.
Poly a key partner of Microsoft recently reported a major downturn in revenues, in Q3 2020 sales fell to US$384M from $502M, the consensus among analysts was that revenue would be US$400.5 million.
losses went from $25M to US$70M for the quarter.
Joe Burton, President and Chief Executive Officer said, “While we are disappointed with our results this quarter, particularly enterprise headsets, we have now begun shipping the first products built on our next-generation architecture for the cloud-connected world”.
“As we ramp the new product portfolio and address our sales and channel distribution issues, we are committed to return to sustained profitable revenue growth.”
Enterprise revenues fell short of guidance by approximately $5 million, with weakness in headsets, while the Companies consumer business was below expectations by approximately $13 million.
The Company has also been trying to offload a build-up in inventory and in the last quarter were able to reduce channel inventory by approximately $60 million. Currently their products are sold at Officeworks and JB Hi Fi.
The Company said during a conference call that sales of their consumer portfolio will be reviewed “during the next few quarters”.
The Company said that they are now shipping their Studio X Series of Video Bars and the CCX line of Microsoft Teams phones however they anticipate revenue contribution from their new products to be modest in Q4.
Chuck Boynton, Executive Vice President and Chief Financial Officer at Poly admitted that the Company was still working on their plans for their consumer business.
He said that their gaming business was the Companies lowest margin business and that it is currently being sold with that sale tipped to be concluded by March 2020.
Shortly after their latest results were revealed Poly shares plummeted 36% because of grim guidance for the current quarter.
The company who paid US$2 billion to acquire Polycom in 2018, said that their latest financials also reflected trouble in its enterprise headset business.