13th Nov 2014 08:10
LONDON (Alliance News) - Spirent Communications PLC Thursday reiterated is fourth quarter revenue expectations, although it warned it expects weaker market conditions to continue throughout the rest of 2014, as acquisitions helped boost revenue in its third quarter.
The communications technology company continues to expect revenue of between USD120 million to USD125 million for its fourth quarter. The company said that it is reviewing its cost structure to align costs with changes in the market whilst also protecting the execution of its strategic plan.
Revenue for the quarter rose to USD110.1 million, up from USD107.7 million a year before, boosted by acquisitions. On an organic basis, revenue fell 3%, due to lower levels of demand for its products on a combination of merger activity at some of its major customers and a lull in capital expenditure as customers assessed future new technology deployments.
In its largest segment, Networks and Applications, revenue fell to USD54.5 million from USD58.9 million, as weaker demand due to merger activities in the US and softening demand in China offset strong growth in Europe.
In the third quarter to end-September, Spirent posted a fall in operating profit to USD2.7 million from USD13.3 million, due to higher levels of investment in its product development, sales and marketing, acquisitions costs, and a USD3.4 million amortisation of an acquired intangible asset.
Spirent made several acquisitions in its first nine months, including acquiring Radvision's technology business unit for USD25.9 million in July, Mobilethink AS for USD20.1 million and the net assets of NetGend LLC for USD1.0 million in September.
"Despite the weakened market conditions, the strategic direction for the Company is unchanged. Spirent has achieved success in winning back market share with key customers through service, support, innovation and focus on customer needs," said Chief Executive Eric Hutchinson in a statement.
Shares in Spirent are trading down 1.6% at 72.50 pence Thursday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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