Spirent Communications Revenue Hit By Weak US Demand; Shares Down - Update

(RTTNews) - Shares of Spirent Communications Plc (SPT.L, SPMYY.PK) plunged around 13 percent in the morning trade in London after the communications technology company reported fourth-quarter revenues at the lower end of its forecast range, reflecting unexpectedly slower demand in the United States.

In its trading update, the company noted that fourth-quarter revenue was approximately $115 million, which is at the lower end of its forecast of $115 million to $120 million. However, there was a further increase in the order book, reflected in a book to bill ratio of 108 for the quarter.

On a geographical basis, the company experienced strengthening in demand in Asia and Europe, while United States was hit by the delay in placing contracts by some major equipment manufacturers.

For the full year, the company's revenue is approximately $413 million, compared to prior year's revenues of $472.4 million.

The company also announced its strategic priorities following the appointment of Eric Hutchinson as its Chief Executive Officer on September 3.

In the statement, Spirent noted that the conditions within its markets continue to be, and will likely remain volatile in the medium term. In this scenario, the Board has identified certain areas that will be an important focus of its future investment. These include the acceleration of the development of virtual test systems, software defined networking solutions, and expansion of its Enterprise sales channel, among others.

According to the firm, these initiatives will require increased investment in both product development and sales and marketing in 2014. In addition, the company will seek selective acquisitions to support this process.

Spirent said it will provide further detail and clarity on the Board's vision and strategy at the time of the preliminary results on February 27.

In London, Spirent shares are currently trading at 86.91 pence, down 12.44 pence or 12.52 percent.