For the third quarter, ShoreTel posted a 57% increase in revenue, and net income was $2.6 million, or $0.06 per share, compared with net income of $1 million, or $0.03 per share, in the same period a year ago.
Gross margins continued to improve, going to 64% from 61%. On the conference call, management indicated that the improvement has been the result of hefty revenue as well as efficient product development.
ShoreTel recently launched version 7.5 of its platform. There are better switches, international support, and more integration with Microsoft's
True, ShoreTel faces considerable competition from the likes of Cisco
What about the Mitel lawsuit? While it's a concern, I think ShoreTel has responded aggressively by filing a countersuit alleging patent infringement by Mitel. ShoreTel is also seeking $10 million in damages for "false or misleading statements" regarding the public offering.
More importantly, it looks like Wall Street is shrugging off the litigation. After all, ShoreTel's stock is up more than 50% since the IPO. But for Foolish investors, it's probably best to be cautious because IPOs can be quite volatile. If you want to pick up shares in ShoreTel, you can probably wait for a lower price as the trading subsides.
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