Axis Strong Growth Continues in Q3 2010

Axis Communications strong 2010 growth continued in Q3 (July-September) 2010 with sales increasing 29.7% year over year. This is the 4th consecutive quarter of strong growth after declining/poor results in the previous 12 months.

Key points from the Axis Q3 2010 interim results and powerpoint presentation:

• Currency effects were minimal for the first time in many quarters, making the actual local sales results be in line with revenue growth
• Americas revenue up 28% 
• EMEA revenue up 39% (a bullish sign given recent past struggles in EMEA)
• Asia revenue up 44% 
• Axis reports future outlook continues to be positive with project inquires showing a 'continued stable trend'
• Gross margins remained at low level of 50.4% (compared to axis historical standards of mid 50s)
• R&D expenditures dropped modestly after a significant increased between Q3 2009 and Q2 2010 (new product introductions over the last 12 months were very strong but relatively slower at ASIS/Essen recently)

Axis now reports, via IMS, that they are the second largest company in video surveillance (by sales, overall, globally - not just IP) with Panasonic #1. In a previous report, Pelco's revenue was reportedly greater than Axis. Given Pelco's admitted sales declines (and dependency on the analog market), it makes sense that Axis is catching up to Pelco.