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Spirent Communications shares jump as it expects full year profit to beat market forecasts

Spirent Communications said full year revenue gained 6%, driven by growth in the networks and security division
ethernet
Spirent saw strong demand for 400G high-speed ethernet testing services

Spirent Communications PLC (LON:SPT) expects full year profit to exceed market forecasts after cutting costs and growing revenue.

The IT network products specialist said its order intake for the year totalled US$470mln, up 6% on the previous year, and revenue gained 6% to US$477mln.

Growth was led by its networks and security division, boosted by demand for 400G high-speed ethernet testing services.

Revenue was also supported by a US$10mln contribution from one-off business with a US defence contractor, which the company does not expect to be repeated in 2019.

The Lifecycle Service Assurance business only saw modest revenue growth due to a major reorganisation in the key customer base.

Spirent said the Connected Devices arm delivered “strong profit growth” in the year, driven by effective cost management.

READ: Spirent chief executive to retire after 36 years at networking specialist

Following efforts to mitigate higher inflation with cost cuts, the company now expects adjusted operating profit of US$75mln to US$77mln, up 30% on the prior year and above analysts’ estimates.

The group had cash of just over US$120mln at the end of the period after dividend payments.

Shares rose 7.3% to 134.35p in morning trading. 

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The group said it had entered 2019 with a “substantially higher order book” compared to the same period in the prior year

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