October 21, 2008 / 8:17 PM / 10 years ago

UPDATE 2-Aastra profit takes heavy hit from Ericsson buy

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TORONTO, Oct 21 (Reuters) - Aastra Technologies AAH.TO said on Tuesday its third-quarter profit plunged 63 percent as it took a C$10 million ($8.3 million) loss on its purchase of Ericsson’s (ERIC.O) enterprise communications business.

Aastra said it earned C$2.6 million, or 17 Canadian cents a share, in the three months to Sept. 30, down from C$7.1 million, or 43 Canadian cents a share, a year earlier.

Stripping out the one-time pretax loss, adjusted earnings were 73 Canadian cents a share.

The Canadian business communications firm also said it has initiated a restructuring program to address the disappointing results from the Ericsson business. Aastra bought the operations from the Swedish telecom equipment maker in in April for about C$108 million.

Quarterly revenue at Concord, Ontario-based Aastra was C$224.5 million, up from C$141.1 million, driven by a 51 percent increase in European business communications sales.

Gross margins widened to 45.1 percent from 42.5 percent, helped by the U.S. dollar’s decline against the euro in the quarter.

The results were released after markets closed. The company’s stock fell 27 Canadian cents to C$9.99 on the Toronto Stock Exchange on Tuesday.

$1=$1.21 Canadian Reporting by Cameron French; editing by Rob Wilson

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