AASTRA TECHNOLOGIES $19.79 - Toronto symbol AAH

AASTRA TECHNOLOGIES $19.79 (Toronto symbol AAH; TSINetwork Rating: Speculative) (905- 760-4200; www.aastra.com; Shares outstanding: 11.8 million; Market cap: $234.6 million; Dividend yield: 4.1%) reported revenue of $175.2 million in the three months ended December 31, 2012. That was down 12.3% from $199.7 million a year earlier.

Sales declined in all regions, including Western Europe, where Aastra gets the majority of its revenue. Excluding the impact of foreign exchange rates, sales declined 7.1% from a year earlier.

Earnings per share rose sharply, to $2.42 from $1.30, due to a number of one-time items, including income-tax recoveries. Without those items, Aastra would have earned $1.15 a share in the latest quarter.

Aastra holds cash of $107.4 million, or a high $9.10 a share, and has no long-term debt. It spends a high 10% of its revenue on research.

The weak European economy has hurt demand for the company’s products and forced it to cut its prices. Aastra needs a sustained economic recovery on the continent to raise its sales and push up its earnings. Still, the stock trades at a reasonable 15.2 times the $1.30 a share that Aastra should earn in 2013. The shares yield 4.0%.

Aastra is a buy for aggressive investors.

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