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ARM Profits Rise 44%

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ARM Holdings

Cambridge-based ARM Holdings has reported a huge increase in profits despite current weak demands in the consumer electronics market.

ARM reported third quarter profits were up 44 per cent on the same period last year to £55.8 million on revenues up 20 per cent to £120.2m, both of which were ahead of analysts' expectations.

The third quarter is often seen as being a natural dip in consumer electronics activity as people hold off for the Christmas rush in the final quarter of the year. However ARM reports royalties a quarter in arrears, meaning these results won’t have been subject to the same dip as its chip-making partners such as Samsung and Texas Instruments.

The basis for ARM’s continuing good results is its licensing agreements with various chip manufacturers and it revealed that it had signed 28 processor licences in the quarter, including 14 new customers.

ARM Holdings

In the quarter one billion ARM-designed chips were shipped into mobile phones and tablets, while 900m chips were shipped into embedded digital devices such as TVs and microcontrollers, a rise of 50 per cent year-on-year.

“In the third quarter of 2011, we saw a continued high level of design activity with many new customers licensing ARM technology for the first time, driven by end market requirements for smarter, low-power chips,” Warren East, CEO of ARM, said.

With the company just after revealing its latest low-power design, the Cortex-A7, and its stranglehold over the tablet market unlikely to be broken any time soon, ARM is in a very strong position in the mobile sector at the moment.

In early morning trading, ARM Holdings rose 0.6 per cent to £5.79, giving the company a market value of around £7.8bn, with its stock having risen by 37 per cent this year alone.

Source: ARM

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