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'Strong headwinds' in certain markets depress earnings of test and measurement technology vendor.

Spirent Reports Full-Year Results

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Light Reading
2/27/2014
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LONDON -- Spirent Communications plc ("Spirent", the "Company" or the "Group") (LSE: SPT), a leading communications technology company, today announces its preliminary results for the financial year ended 31 December 2013.

Financial highlights

  • Group revenue of $413.5 million (2012: $472.4 million); with a sequential improvement of 17% in the second half-year compared with the first half of 2013.
  • Book to bill ratio was 105 (2012: 97) reflecting the improving market dynamics in the second half of 2013 and Spirent's key product launches.
  • Group adjusted operating profit of $50.1 million (2012: $118.3 million) on lower revenue and after increased investment in product development and sales and marketing of $19.3 million compared to the prior year.
  • Dividend increased by 10%. Final dividend proposed of 2.01 cents per Ordinary Share, giving a full year dividend of 3.54 cents per Ordinary Share.
  • Free cash flow of $43.9 million (2012: $84.0 million); cash closed at $216.2 million after share buyback and dividends totalling $76.9 million.

    Operational and strategic highlights
    There were strong headwinds in certain market segments and geographies exacerbated by historical under investment in certain parts of the business given the significant changes in the industry:

  • Intense competition in the data center market and spending shifting to virtual and cloud based services.
  • Wireless device vendors experienced lower profitability and a lull in new technology and service launches.
  • Adverse macro-economic conditions in Europe coupled with spending caution by Chinese customers earlier in the year. In spite of these challenges there were areas of progress:
  • Structural reorganisation of the Group into business units to create maximum focus on meeting customers' changing needs as reported in January 2014.
  • Service providers increased infrastructure spending on high density core routers and 100G Ethernet.
  • Spirent introduced a family of next-generation high speed Ethernet test solutions, incorporating market leading realism and scale, to address increasing complexity and the explosion of data traffic in service provider and data center networks.
  • Launched Avalanche NEXT, a powerful, easy-to-use solution that tests the performance, scalability and security of application-aware network infrastructures with positive feedback from customers.
  • Underscored our industry leadership in GNSS testing with the first commercially available support for the Chinese BeiDou satellite navigation system.

    Spirent Communications plc (NYSE: SPM; London: SPT)

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    Vishnu Goel
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    Vishnu Goel,
    User Rank: Light Beer
    2/28/2014 | 10:12:27 AM
    T&M vendors need to cross crucial Billion Dollar mark!
    These excellent results reported from Spirent indicate sequential and YOY improvement,and a sort of healthy Book2Bill ratio.But the key things for the IP based platform company will be building traction in Asia,Crossing the Billion Dollar mark earlier than targeted and success both in terms of Marquee Customers and wider solution range in the LTE/LTE-adv market.Vishnu Goel T&M+919810101238 
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