UK network technology firm Spirent has warned that its profits for the second half of the year will not meet expectations. The company also announced it is to axe 230 jobs to reduce costs.
Spirent said its Network Products and Systems groups were both performing broadly in line with expectations, with its Commutations division (which accounts for around 60% of sales) experiencing the biggest decline in demand.
Commenting, Nicholas Brookes, Chief Executive of Spirent, said:
The continued decline in spending from network equipment manufacturers and service providers has adversely affected the prospects for our Communications group for the remainder of 2002. The likelihood is that challenging conditions in the telecommunications market will continue into 2003. We are taking immediate and prudent action to reduce costs and maintain cash generation within the business.
The underlying growth in data traffic will eventually result in a market recovery. We continue our emphasis on new product development to ensure that we remain strategically well positioned to respond to our customers’ evolving needs.
The profit warning comes just days after Spirent sold its Monitor Labs business from within its Systems group to a subsidiary of Teledyne Technologies for $24.0 million in cash.