Spirent Communications unveils flat 2012 revenues

Spirent Communications shares plunged Thursday after the company reported flat 2012 revenues and a fall in pre-tax profits.

The UK-based telecommunications company posted revenues of $472.4m for the year, compared to $470.5m in 2011, as a result of a 29% drop in service assurance.

Profits before tax fell 3.0% year-on-year to $110.7m while basic earnings per share fell 5.0% to $0.12.

The book-to-bill ratio, a measure of a companys order backlog, fell from 103 to 97 reflecting the weak macro-economic environment, particularly in the second half of the year.

Nevertheless, the company increased its dividend by 10%, proposing a final dividend of $0.02 per ordinary share which brought the full-year dividend up to $0.03.

The group ended the year with a strong free-cash-flow of $84m, up from $69.3 in the year before.

"The impact of macro-economic conditions on our served markets, particularly in the second half of the year, led to flat revenues and profit performance in 2012," remarked Chief Executive Officer Bill Burns.

"Despite this, Spirent continued to deliver a financial return that remains one of the best amongst its peers. This was achieved during a year of significant change for Spirent, when we transitioned our wireless revenues from legacy technologies to 4G, invested in two important acquisitions, restructured our Service Assurance business and disposed of the Systems division."

During the period, Spirent acquired cyber security provider Mu and Metrico, a mobile device and wireless service company.

Looking ahead, the Spirent expects to see revenue growth from the acquired businesses and macro demand in the group's major regions including Europe, the US and Asia Pacific.

Shares fell 4.40% to 158.50p at 09:47 Thursday.

RD