Spirent slumps after it warns of revenues hit by contract delays

 
City A.M. Reporter
COMS

COMS testing company Spirent Communications warned yesterday that its full-year revenue would likely fall by about 14 per cent after some major equipment makers in the US delayed awarding contracts in the fourth quarter.

The company’s shares fell as much as 15.6 per cent, making it the top percentage loser on the FTSE 250.

Spirent, which tests ethernet networks and 3G and 4G wireless networks and devices, said it expected revenue to fall to about $413m (£250m) in 2013 compared to $472.4m a year ago.

The company also estimated fourth-quarter revenue of about $115m, the lower end of its forecast.

Spirent’s clients include Cisco Systems and Nokia. The London-listed company cut its fourth-quarter revenue forecast in October due to delays in customers taking deliveries.

Yesterday’s estimates underlined that 2013 was difficult and 2014 would also be tough for the company, Jefferies analyst Lee Simpson said.

Spirent needs to increase investment in its businesses this year and focus on a shift from a hardware-backed business to cloud-based software services, Simpson said.

Spirent said it intends to focus on developing virtual test systems. The company is also looking to expand its services in cyber security testing, a spokeswoman said.