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ARM Profits Rise As Texas Instruments Struggles

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British designer and licensor of power-efficient processors, ARM has announced a 31 per cent rise in revenues for the past quarter, while one of the companies that licences its processors, Texas Instruments, recorded a drop in profits and isn’t much more optimistic about the next quarter.

ARM signed up 29 smartphone and tablet processor licenses in the second quarter of 2011, helping it post a pre-tax profit of £33.8 million, up 14 per cent compared to the same period in 2010. ARM also claimed that a huge 1.1 billion ARM-designed processors shipped into smartphones and tablets in the quarter, a figure which Intel will find extremely worrying as it attempts to break into the low-power market.

"Arm enters the second half of 2011 with a healthy order backlog and a robust opportunity pipeline," it said. Looking forward however, ARM issued a note of caution by saying that sales in the third quarter would be lower than in the second quarter with analysts currently expecting an increase of 6 per cent.

                                   Texas Instruments OMAP

Among the many companies using ARM’s designs is Texas Instruments, which posted a drop in second quarter income and warned the third quarter would be not much better.

Second-quarter net income dropped to $672 million, compared with $769 million, in the same period a year earlier, the company said in a statement. Revenue fell one per cent to $3.46 billion.

Texas Instruments makes most of its income from analogue chips seen in a wide variety of hardware including  smartphones, calculators, digital photo frames and even military hardware. The company felt that poor consumer sentiment was to blame for the drop in profits. “Production at some computing and consumer manufacturers appears lukewarm even though we’re heading into the back-to-school and holiday seasons,” said Richard K. Templeton, the company’s chief executive.

Texas Instruments predicts third-quarter sales will be between $3.4 billion and $3.7 billion with analysts predicting sales of $3.61 billion.

Source: New York Times

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