(Alliance News) - Spirent Communications PLC on Wednesday cut its annual outlook, reporting a weak order book and a slow summer period.
Shares in the Crawley, England-based automated test and assurance solutions provider plunged by 31% to 90.00 pence each in London on Monday morning.
Spirent said for the nine months to September 30, it expects revenue to be around 20% behind the prior year.
"We do not see the year-on-year performance improving in the remaining quarter," it said.
The uptick in Spirent's Telecommunications orders seen over the second quarter "dissipated" over the summer, and the expected rebound in September did not materialise.
The company explained that this was due to delays in customer expenditure and technology investments, meaning that order intake for the first nine months of 2023 dropped by 24% compared to the same period last year.
In particular, the company was hurt by a drop in orders for high-speed Ethernet from the Chinese government. "The China market represents a large proportion of revenue which we are now not expecting to receive in this financial year."
However, it saw strong growth in its non-telecommunications end markets, noting good order intake growth in its Positioning solutions during the third quarter.
Chief Executive Officer Eric Updyke commented: "We saw positive trading momentum and pipeline build in the second quarter which gave us confidence for the remainder of the year, however a slow summer and disappointing September meant that we fell materially short of our expectations for the third quarter. In the long run, our drivers remain intact, but the near term orderbook isn't strong enough to support our final quarter expectations, and our outlook for the full year reduces accordingly."
The impact of negative operating leverage will "very materially" affect operating profit in the year as a whole, Spirent said.
By Sabrina Penty, Alliance News reporter
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Spirent (SPT)