Spirent Slims Down

Implications: After years of moribund performance, Spirent may again see significant growth in the test and measurement area.

New CEO is a turnaround specialist focused on improving profitability. Spirent has some unprofitable divisions and product lines that could be jettisoned. The result would be a leaner and more competitive company.


Analysis: New Spirent chairman Edward Bramson, who took over in a December boardroom coup, today took over the CEO title as well after dismissing incumber Anders Gustafsson.

Bramson has said he would like to focus on cost-cutting and improved profitability at the test and measurement company, and today's move is likely to accelerate both.

Spirent's test business has two main divisions: a performance analysis group that makes test equipment for network devices, and a service assurance business that measures performance of live networks. Spirent paid more than $1 billion for the service assurance group but it has never lived up to expectations. Bramson may well be looking to sell or close down this group. Either would instantly make Spirent
more profitable.

In the performance analysis area, departing CEO Gustafsson has had some successes, including signing more than 100 customers for the company's new TestCenter platform and gaining some ground on competitors Ixia and Agilent. But Gustafsson's tenure also was marked by high costs and a focus on service provider business (Spirent's largest customers re equipment makers and not service providers).

Bramson is a turnaround specialist focused on profitability and cost reduction. While he has limited experience in test and measurement, his focus on the bottom line ultimately should help make Spirent a leaner and more competitive company.