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Spirent Rises to 10-Year High After Results Beat Its Forecasts

May 2 (Bloomberg) -- Spirent Communications Plc, a U.K. maker of telecommunications testing systems, rose to the highest in 10 years in London trading after saying first-quarter results beat its forecasts.

Revenue increased 5.4 percent from a year earlier to $129.4 million, the Crawley, southern-England based company said in a statement today. Sales at its Performance Analysis unit jumped 16 percent to $107.3 million.

“Performance analysis is going gangbusters,” Panmure Gordon & Co. analyst George O’Connor, who has a buy rating on the stock, said in a note to clients today. “While the short term remains uncertain, structurally, the world is in a better place for Spirent than it was a few short months ago.”

Spirent paid $40 million last month for California-based Mu Dynamics, its biggest acquisition since 2006 and only the second since that year. Mu Dynamics does testing for cloud computing and cyber security.

Spirent is focusing on growth markets such as mobile internet, cloud computing and global positioning systems. The company said its performance analysis unit is also benefiting from its strong position in Asia-Pacific.

“All of these drivers are very positive for Spirent’s future and will support our continued growth through 2012,” it said in the statement.

Service Assurance

The stock rose as much as 4.3 percent to 176.3 pence, the most since January 2002. It was up 1.3 pence, or 0.8 percent, at 170.3 pence at 10:45 a.m. in London, extending its gain so far this year to 44 percent.

“We have seen Performance Analysis outperforming once again and there is swift action being taken on Service Assurance,” said Lee Simpson, an analyst at Jefferies International Ltd. in London, in a phone interview. “These are the positives for investors to take away from this.”

Spirent has outpaced all of its competitors on the FTSE 350 Technology Hardware and Equipment Index this year. Laird Plc has advanced 39 percent and CSR plc has jumped 22 percent. Arm Holdings Plc has declined 13 percent.

Operating profit rose 15 percent in the first quarter to $27.2 million and adjusted basic earnings per share increased 15 percent to 3.03 cents from 2.63 cents a year earlier.

The results were a “big beat” to Panmure’s estimates, O’Connor said.

Revenue and operating profit in Spirent’s service assurance and systems units declined in the period as customers deferred orders and demand for consumer wheelchairs fell.

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