(Adds comments from analyst, details from conference call)
By John Tilak
BANGALORE, Jan 23 (Reuters) - Polycom Inc PLCM.O, which makes video conferencing products, reported fourth-quarter earnings above Wall Street estimates, helped by demand for its Internet protocol-based collaboration services.
Fourth-quarter net income fell to $22.8 million, or 25 cents a share, compared with $25.8 million, or 28 cents a share, a year ago. Revenue rose 41 percent to $263.3 million.
Excluding items, net income rose to 42 cents a share.
Analysts expected earnings of 39 cents a share, excluding items, on revenue of $252.8 million, according to Reuters Estimates.
"Clearly, given its peers like ShoreTel (SHOR.O) preannouncing negatively, this is a very positive surprise," Wedbush Morgan Securities analyst Scott Sutherland said by phone.
Sutherland said the strong growth was driven by demand for video revenue, which made up nearly half of its revenue for the quarter, and the launch of new products.
The company, which competes with Norway's Tandberg TAA.OL, has been rapidly expanding its high-definition products line by recently launching a mid-range HD video service and an executive desktop HD video product.
Polycom counts Willis Group Holdings Ltd WSH.N, Britain's BSkyB BSY.L and Altera Corp ALTR.O among its customers.
Chief Executive Robert Hagerty said companies use its video conferencing products and services to cut costs and save on international trips.
"One could argue that our value proposition in fact increases in a tougher economic environment," Hagerty said in a conference call.
He said voice revenue, which contrbuted 37 percent in the quarter, will be the key driver in 2008, and added that its partnerships with Microsoft Corp (MSFT.O) and 3Com Corp COMS.O will drive revenue in the coming year.
Polycom shares rose 8.3 percent to $24.13 in trading after the bell, after closing at $22.28 Wednesday on the Nasdaq. (Editing by Vinu Pilakkott, Anil D'Silva)