Spirent says medicine working

TELECOMS equipment maker Spirent cheered its beleaguered shareholders by claiming that a recent dose of bitter medicine was working. The former Bowthorpe, a FTSE 100 component, appeared to following rival Marconi downhill when it delivered a devastating profits warning in August.

But a trading statement from the group suggested sales in September and October had halted their downward spiral and that restructuring measures designed to save £30m a year had helped stabilise the business.

The group is operating profitably and net debt is down to £339m from £348m four months ago. The shares surged 29 1/4p to 154 1/2p, further buoyed by news of a deal with American outfit Verizon.

Spirent's broker expects profits before one-off charges of £99m on sales of £808m this year.

Meanwhile, Cisco Systems, a buyer of Spirent's equipment, posted a first-quarter loss of $268m (£167.5m) but also suggested business was stabilising. Sales for the quarter at the world's biggest manufacturer of networking equipment fell 32% to $4.45bn from $6.52bn for the same period last year, but showed a quarter-on-quarter gain. They exceeded market expectations.