By: Tomas Ronolski - AllPennyStocks.com News

Wednesday, June 26, 2013

A good portion of the U.S. technology sector is rallying on Wednesday, with the Nasdaq exchange up another 35 points as the day winds towards the closing bell to extend Tuesday’s gains of 27 points. North of the border, Canadian stocks have slid into the red with the telecom subgroup pacing the laggards and communications equipment makers mostly posting losses. It has been another tough day for dually-listed Mitel Networks Corp. (TSX:MNW) (Nasdaq:MITL), which is down about 10 percent from $4.00 highs hit yesterday, in spite of decent news this week. On Monday, the provider of cloud and unified communications solutions released its earnings for the fourth quarter and fiscal year ended April 30 that beat analyst expectations on both profit and revenue, but failed to push the US-listed shares of the company through the $4 mark that is proving extremely tough resistance. Shares have only closed above that level once in 2013, although they have tested it on many occasions.

For the latest quarter, Mitel reported revenue of $150.9 million compared to $157.6 million in the year prior quarter. Adjusted profits for the quarter were $13.9 million, or 25 cents per share, down from $16.3 million, or 30 cents per share, in the year earlier quarter.

Analysts were expecting earnings per share of 24 cents on revenue of $145.7 million.

Also this month, Mitel completed its acquisition of original equipment manufacturer prairieFyre at a net cash cost of about $20 million. prairieFyre was a supplier to Mitel and the acquisition, which is expected to be accretive in the first year, gives Mitel a cloud-based contact center solution as well as a new inroad to potential sales for its VoIP and communications products.

The company delivered news on Wednesday that the Rock and Roll Hall of Fame Museum in Cleveland, Ohio is now employing the Mitel technology. In a video posted on the Mitel website, Richard Shoemaker, principal at R.M. Shoemaker and Associates, explained that Mitel (and local Mitel partner Warrick Communications) stood out from the crowd to deliver the most current and sophisticated applications to meet the needs of mobility and unified communications for the Hall of Fame. Mitel’s bid was selected over other majors in the business, such as AT&T (NYSE:T) and ShoreTel (Nasdaq:SHOR).

Brian Kenyon, EVP and chief financial officer at Rock and Roll Hall of Fame, said that he anticipates a four-year return on investment for making the switch to Mitel as lowered operating costs will offset the upfront costs of the system.

"The Rock and Roll Hall of Fame is a legendary organization of historical, social and musical significance. It is also one of the coolest museums anywhere in the world," said Martyn Etherington, CMO for Mitel. “Just to know that Mitel is in some small way contributing to the rock and roll community is extremely gratifying."

Both U.S. and Toronto-listed shares of Mitel are thinly traded, with the U.S. version seeing more shares changing hands on a daily basis. Shares of MNW have been trending upward in 2013, gaining about 18 percent to date, including losing more than 4 percent in the last two trading days to $3.66.

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