Spirent Communications first quarter profit drops

FTSE 250-listed communications group Spirent Communications said first quarter operating profit plunged as customer reduced spending.

Operating profit tumbled to $7.6m in the period from January 1st to April 30th from $25.5m the same time a year earlier. Basic earnings per share plummeted to 0.85 cents from 2.67 cents the previous year.

"All major regions saw a reduction in demand consistent with our customers' reduction in capital expenditure. Customers delayed projects as their plans have been slow to be released for the year, and certain large accounts have not repeated the high level of spending seen in the corresponding period in 2012," said Spirent.

Revenue fell to $96.8 during the quarter from $117.4m last year. Adjusted operating profit decreased by $15.6m to $10.5m.

Chief Executive Officer Bill Burns commented: "Trading during the first quarter was more challenging than anticipated, yet the fundamental drivers of Spirent's business remain positive as investment in the telecom and IT industries will continue to be made on a large scale."

"Market conditions are likely to constrain growth prospects in the short term, however in order to underpin Spirent's longer term strategy and future growth we will continue to increase the level of investment in new product development in order to bring new solutions to market that will offer our customers the capability they demand," he added.

CJ