Spirent spirals back towards seven-year low

Weakness in wireless has sent Spirent shares spiralling back down towards the seven-year low they set almost a year ago, though directors still were confident underlying results would remain in line.

Chief financial officer Rachel Whiting has announced her retirement after roughly three decades at the company.

In an otherwise encouraging third quarter report, the telecoms and technology testing group reported a wireless revenue decline of 11% due to the "continuing volatility of demand" for its carrier acceptance market which it said was caused by "fundamental structural and technology changes in the market".

Analysts at Investec noted that the wireless division is "structurally challenged" with a stronger competitor Rohde & Schwarz in a tough end-market, which retain a "fairly bleak" outlook.

Spirent, warning that it expects the wireless weakness to impact 2016 revenue, has looked to cut $25m of annual costs of at an exceptional cost of $15m.

Other divisions enjoyed growth of 13% in Networks & Applications division, partly due to the shipment of orders received too late in the second quarter to be converted to revenue, while the Service Assured unit grew 111%.

Service Assurance benefitted from a shipment of hand held test tools later than an equivalent load in 2014.

Overall, this meant order intake in the period was $100.9m compared with $104.7m in 2014.

Free cash inflow was $18m, much higher than a year ago, with $29.1m in the year to date.

Outside of wireless, Investec said the numbers were a "decent beat", well ahead of revenue and operating profit estimates.

Analysts were impressed by geographical strength in the US and Asia, but noted some caution about Europe.