Test & Measurement

Spirent Slammed by Slowdown

Spirent saw its share price slump by 19% after it warned that "soft" market conditions would result in worse-than-anticipated financials for the second half of this year.

The test systems specialist issued a trading statement to say that "demand levels dipped sharply as a result of merger activity and delays in capital expenditure as future new technology deployments are being assessed in areas in which Spirent has increased its investments." It noted that its business in the US and China has been particularly affected. (See Spirent Puts 400GigE to the Test and Spirent Unveils Virtual Test Bed for SDN, NFV .)

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The news came as a surprise, as Spirent Communications plc had reported a 16% increase in revenues for the first half of the year to $221 million, and with a number of portfolio-enhancing acquisitions under its belt, had expected that momentum to continue for the rest of 2014. (See Spirent Acquires Mobilethink, Spirent Spends $25M on Radvision VoLTE Unit and Spirent Buys CEM Specialist.)

Now Spirent expects third-quarter revenues to be about $110 million, only slightly higher than the same period a year ago, while fourth-quarter revenues are set to be in the range of $120 million to $125 million, again slightly better than in 2013. The company's operating profits "will be impacted" by the lower-than-expected revenues, it noted.

Investors didn't like the news, as Spirent's share price slumped by 19% to 80 pence on the London Stock Exchange.

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

MarkC73 10/7/2014 | 1:06:20 PM
Re: SHort term blip? I was thinking along the same lines, and was wondering if the woes IXIA had felt earlier were just hitting the industry in general or if it was something home bred.  I'm actually surprised that things are slowing down, with all the innovation going on, one would think that the need to test bed new services and platforms would drive this sector.
[email protected] 10/7/2014 | 8:18:30 AM
SHort term blip? Looks to me like SPirent has spread its bets quite well and that there is little it, or other comopanies can dom, about the impact of capex decision chahges and impact of M&A. I can't imagine this isn't short-lived but let's see what happens when the lieks of Ixia report their financials, see if there is a trend.
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