UPDATE 2-Polycom quarterly earnings top Street

* Q2 non-GAAP EPS $0.29 vs est $0.28

* Q2 rev $230.7 mln beats estimates

* North America, Asia grow sequentially

* Sees flat to 3 pct sequential revenue growth in Q3

* Shares up 4 pct (Adds conference call details, analyst comment)

By S. John Tilak

BANGALORE, July 15 (Reuters) - Video conferencing products maker Polycom Inc (PLCM.O) reported a quarterly profit that beat Wall Street estimates as demand improved across markets in commercial and public sectors.

The company also forecast flat to 3 percent sequential growth in revenue for the third quarter.

The company has been expanding its high-definition and telepresence products, which greatly improve the quality of video and make it more realistic.

Its video products business grew 3 percent quarter-over-quarter to $161.7 million. Voice communications remained flat at $69 million.

Polycom recorded sequential revenue growth in North American and Asia, while revenue from Europe fell.

"Enterprise spending is stronger than it was in the first quarter. And they've certainly benefited from that," Morgan Keegan analyst Tavis McCourt said.

"It's pretty apparent that the worst -- in terms of enterprise spending -- is probably behind us for the year."

Things improved a bit in the second quarter and should continue to improve in the second half of the year, McCourt added.

In a weak economy when companies pull back on travel, videoconferencing is seen as a cost-effective alternative. Polycom and Norway's Tandberg TAA.OL dominate the market.

In the second quarter, Polycom won contracts with French retail group Auchan [AUCH.UL], UK office space provider Regus and law firm Perkins Coie.

"Within the enterprise, customers are viewing Polycom as an opportunity to reduce their costs," Kaufman Bros analyst Colby Synesael said.

Polycom's second-quarter net income fell to $15.3 million, or 18 cents per share, from $17.8 million, or 20 cents per share, a year earlier.

Excluding items, it earned 29 cents per share, beating market estimates by a penny.

Revenue fell 15 percent to $230.7 million. Analysts were looking for $223.2 million, according to Reuters Estimates. Shares of the company rose 4 percent to $22.71 in trading after the bell. They closed at $21.75 Wednesday on Nasdaq.

Polycom's customers include Willis Group Holdings Ltd (WSH.N), Britain's BSkyB (BSY.L) and Altera Corp (ALTR.O). (Editing by Ratul Ray Chaudhuri, Vinu Pilakkott)