It was another tough quarter for PBX maker Aastra Technologies Ltd., which again blamed the strong Canadian dollar for a drop in sales.
The Concord, Ont.-based company said Tuesday that unaudited sales for its third quarter totalled $161.9 million, compared to $198.7 million for the same period a year ago, a drop of 18.6 per cent. The company said it lost $18.7 million in currency exchange in Q3 compared to the third quarter of 2009. Excluding the impact of foreign exchange, the sales drop would only have been 9.2 per cent compared to the year ago period.
However, sales had also dropped compared to this year's second quarter as well, when Aastra pulled in $171.2 million, and $171.9 million in the first quarter. For the nine months ending Sept. 30, sales totalled $504 million, compared to $615 million for the samer period in 2009.
Net earnings for the latest quarter were $400,000, compared to the $5.3 million in Q2, partly due to a drop in gross margin. A weaker Euro was part of the cause, the company said, but it was also hurt “by an unfavorable product mix and a higher overhead ratio.”
In a research note, National Bank Financial analyst Kris Thompson noted last year was “unseasonably strong” for the company, and its third quarter is traditionally weak. However, Tuesday's results were worse than expected on the lower gross margin alone, he wrote. Margin is important for Aastra's strategy, which is based on strong cash flow, he explained. Management expects a rebound in Q4.
Net earnings for the first nine months of this year were $9.5 million, compared to $29.3 million for the same period in 2009.
Aastra makes a range of telephony equipment from the Aastra 5000 IP PBX and Clearspan VoiP softswitch to desktop phones.