ShoreTel tops analysts estimates in 2Q, ups revenue 22%

ShoreTel generated record revenues in its second quarter for fiscal 2012, and surprised analysts by reporting earnings that beat their expectations by 400 percent.

The IP telephony company also announced it had acquired M5 Networks, a hosted VoIP and UC provider for $160 million (see ShoreTel acquires M5 Networks for $160M as it looks to develop cloud business).

Sunnyvale, Calif.-based ShoreTel said revenue grew 22 percent year-over-year to $58 million, and up 8 percent from the previous quarter. Non-GAAP net income was $1.4 million or 3 cents per share, compared with a non-GAAP net loss of $1 million, or 2 cents per share a year ago. Analysts had expected ShoreTel to report a 1 cent loss for the quarter; the second quarter is typically a seasonally strong one for the company.

During the company's earnings call, chief executive Peter Blackmore said the U.S. Enterprise IP telephony market as well as the U.S. pure IP telephony market grew in the September 2011 quarter after three quarters of modest declines. Synergy Research, he said, estimated the U.S. Enterprise IP telephony market was up 9 percent in the quarter and worldwide Enterprise IP telephony also grew approximately 8 percent.

"ShoreTel's market share within both worldwide and the United States have grown significantly year-over-year," Blackmore said. "We expect to build these market share gains and continue to close the gap between our current number three position and the number two player in the U.S."

ShoreTel said highlights for the quarter included an expansion of its channel. The company added some 60 new partners globally, 38 via its relationship with ScanSource. Blackmore pointed to the addition of Howard Industries, which has revenues in excess of $1 billion and is the largest employer in Mississippi; it selected ShoreTel as its exclusive UC provider.

"We also added a record of nearly 1300 new customers in the quarter, a sequential increase of 24 percent over quarter one," he said, singling out First Republic Bank, which will also use ShoreTel's UC solution including ShoreTel Mobility for 3,000 employees at 65 sites.

ShoreTel forecast revenue of $53 million to $57 million in the current quarter.

For more:
- see this release
- see this SeekingAlpha transcript

Special Report: Enterprise Communications earnings in the fourth quarter 2011

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