ARM Holdings Posts Higher Profit For Q1

(RTTNews) - Chipmaker ARM Holdings plc. (ARM.L, ARMH) reported Tuesday a profit for the first quarter that grew from last year, on higher shipment of chips, improved operating margins and revenue growth in both licensing and royalty segments.

Looking ahead, the company said it expects Group dollar revenues for the second quarter and full-year 2015 to be in line with market expectations.

During the quarter, the chip maker experienced growth in shipments of chips based on ARM processor technology, and shipped 3.8 billion ARM-based chips, up 31 percent from last year.

"As the world becomes more digital and more connected, we continue to see an increase in the demand for ARM's smart and energy-efficient technology, which is driving both our licensing and royalty revenues. In recent months many handset OEMs have announced smartphones and tablets based on ARMv8-A and Mali graphics processors," CEO Simon Segars said in a statement.

Based on IFRS, profit before tax increased 33 percent to 103.4 million pounds from 78.0 million pounds in the previous year. On an adjusted basis, normalized profit before tax was 120.5 million pounds, compared with 97.1 million pounds last year.

Profit for the first quarter increased to 85.5 million pounds or 6.0 pence per share from 62.3 million pounds or 4.4 pence per share last year. Earnings per American Depository Share or ADS, were 26.7 pence per share, up from 22.0 pence per share in the prior year.

Excluded certain items, normalized earnings per share for the quarter were 7.1 pence, compared with 5.6 pence last year.

Revenues for the quarter grew 22 percent to 227.5 million pounds from 186.7 million pounds reported last year. In US dollars, revenue increased 14 percent to $348.2 million from $305.2 million in the prior year.

Total technology licensing revenues grew 3 percent in US dollars to $133.2 million, with a 31 percent increase in physical IP licensing revenue, while processor licensing revenue declined 2 percent. Total technology royalty revenues also improved 28 percent to $184.7 million from a year ago.

Normalized operating margin for the quarter improved 130 basis points to 51.7 percent from last year's 50.4 percent.

In Tuesday's regular trading session on the LSE, ARM.L is currently trading at 1,208.00 pence, up 58.00 pence or 5.04% on a volume of 1.03 million shares.