7th Oct 2014 07:24
LONDON (Alliance News) - Spirent Communications PLC Tuesday warned that its revenue started to be hit as trading conditions softened in the latter part of the third quarter, and it expects revenue and operating profit in the fourth quarter to be lower than it had hoped.
In a trading update, the company warned that demand levels dipped sharply as a result of merger activity and delays in capital expenditure, as future new technology deployments were being assessed in areas in which Spirent has increased its investments. It said the impact was being most felt in its networks and applications businesses.
Spirent said it now expects third-quarter revenue to be slightly below USD110.0 million, compared with USD107.7 million in the third quarter of last year, while fourth quarter revenue is now expected to be in the range of USD120.0 million and USD125.0 million because the weaker trading conditions will likely persist during the quarter.
"Operating profit will be impacted by the loss of gross profit on lower revenue than expected," it said.
When the company put out its interim results at the end of July, it had said it expected "further advances" in the second half of the year and high single-digit organic revenue growth for the year as whole, supplemented by strategic acquisitions.
It reported USD413.5 million of revenue for 2013 as a whole, of which USD190.4 million came in the first half. Operating profit for the whole of last year was USD39.1 million. Revenue in the first half of 2014 was USD221.0 million.
Spirent will give further details when it puts out its interim management statement on November 13.
Spirent shares were down 17.9% at 81.00 pence early Tuesday, by far the biggest decline in the FTSE 250.
By Steve McGrath; [email protected]; @stevemcgrath1
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