US takeovers hit Spirent

FALLOUT from America's multibillion-dollar telecoms takeover wars has been felt sharply at Spirent, the UK-based equipment testing group.

With its major clients Verizon and SBC at the heart of the merger activity, Spirent saw revenues at its service assurance division - which constantly checks the quality of traditional DSL and lease lines - more than halve during the first three months of this year.

That forced it to issue a major profits warning today, with analysts slashing their earnings forecasts from around £47m to about £35m. Spirent shares slumped 15½p, or 28%, to 403¾p.

Chief executive Anders Gustafsson, who joined last August, said telecoms carriers had also reduced spending as they concentrated their efforts on developing the next generation of networks like BT's 21st Century project.

The group cut 87 jobs at service assurance, or 15% of the division's workforce, in February, but still expects it to make an operating loss of £5.4m in the half year.

? Colt Telecom confirmed that the telecoms market in Europe remains tough as it reported a modest 1.4% rise in first-quarter revenues and a 22% reduction in earnings to £37.1m.