Communications company Polycom Inc.'s stock dropped by over a quarter on Thursday, in the wake of the company's third quarter earnings report, which missed analysts' expectations.

As of mid-Thursday, Polycom's stock was down over 22%, from over $21 per share to around $16. Prior to Thursday, stocks had fallen 29 percent after Polycom reported second quarter results in July.

Polycom reported third quarter profits increase 37% on Wednesday, a pace far below the over 200% increase of each of the past three quarters. The company reported revenue of $379 million in the third quarter, down 23 percent from 2010. The company said in a conference call that fourth quarter revenue was a projected $401.8 million, below previous estimates of $417 million.

Andy Miller, a former Cisco sales chief, is CEO of Polycom, which bought Hewlett Packard's videoconferencing platform for $89 million in June.

He said the company's strategy of pursuing emerging markets and improving its footprint in Central Europe were yielding excellent results. The company's consolidated net revenues totaled $197 million in the Americas, $92 million in Europe, the Middle East and Africa and $90 million in Asia. The company had 3,876 employees worldwide at the end of the third quarter, a 7 percent increase from the previous quarter.

Miller said that lower earnings were a result of overall economic effects and represented a room for improvement for Polycom, but remained optimistic.

Our powerful software-based cloud and mobility strategy is beginning to take shape as evidenced by our recent partnership and acquisition announcements, he said during the conference call.

But concerns over competition also dampened stocks.  Cisco acquired BNI Video on Thursday, and Logitech bought Italian firm Mirial, which specializes in mobile video. Microsoft's $8.5 billion acquisition of Skype in May also made it a new player in the field. Microsoft is also a partner with Polycom.