Spirent stabilising after testing times

Spirent Communications continued to face testing times in the third quarter but, with a bit of help from recent acquisitions, expects to see top line growth in the final quarter.

Revenue from continuing operations in the third quarter of 2012 declined to $111.7m from $115.4m the year before, as some of the testing and measurement specialist's customers deferred spending decisions.

Performance Analysis revenues were steady at 103.8m (Third quarter, or Q3, 2011: $104.0m); Service Assurance turnover was down 31% to $7.9m (Q3 2011: $11.4m).

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The underlying revenues in the fourth quarter of 2012 are expected to be similar to last year and with the addition of revenues from acquisitions could show some growth overall, the group asserted.

Reported pre-tax profit fell to $26.3m from $28.9m in the third quarter of last year, while adjusted operating profit, which excludes one off items, dipped to $28.2m from $29.3m.

Diluted earnings per share from continuing operations in the third quarter retreated to 2.77 cents from 2.95 cents the year before. The $64m sale of the group's systems division went through at the beginning of November, and the group said it expects the net proceeds will be returned to shareholders in the form of share buy-backs.

Cash and cash equivalents at the end of September were $191.7m, down from $234.7m at the beginning of July, reflecting the acquisition of Metrico Wireless for $52.0m in September 2012.

"We have made good strategic progress in the third quarter executing on the acquisition of Metrico Wireless and disposing of the non-core Systems Division, allowing us to focus the group's activities exclusively on the faster growing test and measurement market. As a result, we intend to increase investment in the technologies that will serve our customers' evolving needs while at the same time pursuing initiatives to expand our served markets," revealed Bill Burns, Chief Executive Officer of Spirent.

JH