RADVision: Not Expecting the Expected (RVSN, CSCO, PLCM, BBBB, PGI, MSFT)

RADVision Ltd. (NASDAQ: RVSN) is going to get hit today after lowering guidance.  This may have been worse than many expected, but RADVision is now in a spot that it is going to likely be harder and harder to live up to expectations.  Cisco Systems, Inc. (NASDAQ: CSCO) and its acquisition of Tandberg was arguably the start of things heading south, but new offerings from Polycom, Inc. (NASDAQ: PLCM), and now the acquisition of Blackboard Inc. (NASDAQ: BBBB) from a private equity financial buyer are only going to add pressure.  Throw in the new iMeet from Premiere Global Services, Inc. (NYSE: PGI), Skype, and offerings from or through Microsoft Corporation (NASDAQ: MSFT) and it becomes harder to expect RADVision to keep delivering.

The news this morning is bleak and reflects many of these issues.  RADVision cut its revenues to $18.0 to $18.5 million for the second quarter, and that led it to cut earnings guidance to -$0.41 to -$0.44 in GAP EPS and -$0.27 to -$0.30 on a non-GAAP EPS basis.

Prior guidance was $22 million in revenues; -$0.17 GAAP EPS; and -$0.12 non-GAAP EPS.  Thomson Reuters had estimates of -$0.12 EPS and $21.79 million in revenues, but this was from only two analysts.

The lower guidance is due called “primarily the result of lower than anticipated revenues in the company’s Video Business Unit (VBU),” and that will now be about $14.5 to $15.0 million. As noted in Cicso’s ties… “This includes revenues from Cisco of approximately $1.5 million, which is in line with forecast but substantially below the $9.5 million of revenues from Cisco in the second quarter of 2010. Despite its revised forecast, the Company’s core VBU revenues are expected to increase by more than 30% from the second quarter of 2010, after excluding revenues from Cisco from both periods.”

The revenues from RADVision’s Technology Business Unit also being lowered and now expected to approximate $3.5 million.

RADVision is a thin volume stock.  Shares are indicated down over 5% at $7.41 this morning versus a 52-week range of $6.07 to $12.00.  This is an example of what can happen when smaller companies lose their growth partners.

JON C. OGG