Spirent sees subdued US, China show hurting revenue growth
(Reuters) - Spirent Communications Plc, a British telecoms testing company, said it expected a marginal rise in third-quarter revenue as performance in the United States and China remained subdued.
The FTSE-250 company's shares fell 19 percent to their lowest in more than five years. The stock was the biggest percentage loser on the London Stock Exchange on Tuesday morning.
Spirent, which tests ethernet networks, 3G and 4G wireless networks and devices for companies such as Cisco Systems Inc and Nokia, said revenue for the third quarter was expected to be slightly below $110 million (68.57 million pounds) compared with $107.7 million a year earlier.
Demand levels dipped "sharply" because of merger activity and delays in capital expenditure as future new technology deployments are being assessed, Spirent said.
"We believe this relates in part to AT&T Inc (one of Spirent's largest customers) which is exerting significant pressure on its suppliers in H2," UBS said in a note to clients.
Spirent said the reduction in activity levels has primarily impacted the networks and applications business, its largest division by revenue last year.
The division tests long-term evolution (LTE) 4G networks, voice over long-term evolution (VoLTE) technology and wireless networks and devices amongst others.
Spirent received over 50 percent of its revenue from the United States in 2013, while about 35 percent came in from Asia Pacific.
Fourth-quarter revenue is now expected to be between $120 million and $125 million compared with $115.4 million in 2013, the company said on Tuesday.
Shares in the Crawley, West Sussex-based company were down 18 percent at 80.85 pence at 0723 GMT (08:23 a.m. BST) on the London Stock Exchange.
(Reporting by Noor Zainab Hussain in Bangalore; Editing by Gopakumar Warrier)
