Spirent shares plunge as customers delay investment decisions

Shares in telecoms testing company Spirent Communications slumped on Friday as the company said it expected earnings to be weighted towards the second half as customers delayed investment decisions.

Full year revenue grew by 5.5% to $607m as the company said it had coped with global economic challenges, supply chain constraints and increasing cost inflation.

“As previously communicated, global market economic conditions have been impacting some of our customers, resulting in delays to their investment decisions,” Spirent said in a trading update.

“Whilst we expect customers to remain committed to their development projects overall, evidenced by no cancellations, the group's performance is now likely to have a heavier than usual weighting to the second half of 2023.”

Spirent said it continued to win important strategic deals and built its orderbook by 7% last year. It expects to deliver an adjusted operating profit slightly ahead of market consensus.

Its high-speed ethernet operation grew strongly driven by new product releases including new application security products, which offset some customer timing impacts in Lifecycle Service Assurance, it added.

Reporting by Frank Prenesti for Sharecast.com