Canadian PBX maker Aastra Technologiessaid sales in its second quarter dropped just over 10 per cent comparedto the previous quarter, cutting deeply into its net earnings. Thequarter was “tough and disappointing,” chairman and co-CEO Francis Shentold financial analysts in a teleconference Monday. However, he was“cautiously optimistic” the second half will be better.

Sales for the three months ended June 30 were $197.2 million,compared to $219.3 million for the quarter before. The biggest sourceof the sales drop was Germany, where sales to small and mediumbusinesses dropped “dramatically,” and in the Nordic countries ofSweden, Denmark and Norway. Canadian sales were slightly down, whileU.S. sales seemed to be recovering, he company said. Selling, generaland administrative expenses couldn’t be cut fast enough to cover thedrop in sales, the company said. As a result, net income for the secondquarter was $5.5 million compared to $14.1 million in the first quarter.
“Sales are very turbulent week to week, month to month,” Shen said.

Aastra, which was built in part on buying older Nortel’s phonesystems several years ago, couldn’t afford to make an offer this monthfor Nortel’s enterprise communications assets, won by Avaya. However,the final winner for that division could still have to be determined byan court-supervised auction. Before the recent bidding war for Nortel’swireless assets, Shen confessed, he would have bet that the initialdeal-maker would be the winner. However, Ericsson beat out NortelSiemens Networks for the wireless unit, although NSN first struck adeal with Nortel. Now, Shen has concluded “anything can happen” in anauction.

Shen hinted that if there a winning bidder wants to dispose of aunit it doesn’t want Aastra is all ears. “We certainly have indicatedto various parties that if they’re interested in a partial transactionwith us we’d definately be interested.”
As for who eventually gets the Nortel enterprise assets, Shen said itdoesn’t matter. Their disposal is another sign the communicationsindustry is consolidating, he said. “Whether it goes to Avaya or toSiemens the impact to us is generally positive to us in that theplayers are shrinking.”

“If a new players comes into the space,” he added, “it’s a different story.”

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Howard Solomon
Currently a freelance writer, I'm the former editor of ITWorldCanada.com and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including ITBusiness.ca and Computer Dealer News. Before that I was a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times. I can be reached at hsolomon [@] soloreporter.com