Spirent blames lack of 4G investment for 17.5% drop in sales

Spirent blames lack of 4G investment for 17.5% drop in sales

Network services company Spirent has seen a 17.5% drop in year-on-year revenues for Q1, 2013.

The network vendor posted revenue of $96.8 million for the first three months of 2013, compared to $117.4 million a year earlier, and the company cited a lack of 4G development as reasons for the poor results.

"We’ve seen decreasing activity in pretty much every customer account – in North America, Europe and elsewhere, in Ethernet and wireless," Eric Hutchinson, CFO of Spirent, told the Financial Times.

"One customer which spent $3 million with us in the first quarter of 2012 actually spent zero this year, but they assure us they’ll start spending in the second quarter.

"It’s almost as though macroeconomic concerns have caused everyone to pause," he added.

4G LTE services have faced delays in numerous countries.

UKand Czech Republic has suffered delays with rolling out 4G networks, and the Brazilian market is at present installing 4G for the imminent summer football tournaments.

Spirent is targeting high-speed Ethernet, cyber security and voice traffic instead of 4G to drive sales in products and services but operators adopting 4G networks remain pivotal to its operations.

“The rate of growth in 4G didn’t make up for the fall in 3G,” said Hutchinson.

“[Ethernet, cyber security and voice traffic over 4G] address the areas where customers are planning to spend money.”

The company reportedly has net cash of $248.6 million at the end of 2013, which means, despite the decline in sales, dividend and acquisitions would not be affected by the downturn for the coming year.

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