Chipmaker ARM Holdings Plc (ARMH, ARM.L) Tuesday posted higher first-quarter profit, as revenues climbed 28 percent, with strong performance in licensing and royalty revenues.
Profit for the quarter climbed to 51.9 million pounds from 37.4 million pounds. Earnings per share increased to 3.7 pence from 2.7 pence. The results are on an IFRS basis. Pre-tax profit advanced to 67.1 million pounds from 51.3 million pounds. On a normalized basis, profit before tax climbed 44 percent to 89.4 million euros.
Normalized figure is after adjusting for acquisition-related and share-based payment costs, disposal and impairment of available-for-sale financial assets and intangible amortisation and share of results of joint ventures. Revenues increased 28 percent to 170.3 million pounds from last year's 132.5 million pounds.
Total PD revenues climbed 32 percent to 132.1 million pounds, with a 26 percent increase in Licensing revenues and a 36 percent improvement in Royalties revenues.
First-quarter royalty revenue was generated from the shipment of some 2.6 billion ARM processor-based chips, an increase of 35 percent from last year.
Warren East, CEO, said, "ARM has delivered another quarter of strong revenue and earnings growth, driven by robust licensing and record royalty revenue. Everyday devices are becoming smarter, more connected and more energy efficient, which is increasing the applicability of and demand for ARM's technology.''
East recently said he has decided to retire from the company, effective July 1. Simon Segars, currently President of ARM, will become the new CEO when East retires.
ARM said its royalty revenues again outpaced the wider semiconductor industry, driven by market share gains in key end markets including digital TVs and microcontrollers. The firm noted that even low cost smart devices can contain multiple ARM-based chips.
Group order backlog at the end of the first quarter was up 5 percent sequentially. ARM signed 22 processor licenses in the first quarter.
Looking ahead, ARM expects group revenues for full year 2013 to be at least in line with current market expectations.
ARM said relevant industry data for the first quarter, being the shipment period for ARM's second quarter royalties, points to a sequential decrease in industry-wide revenues of around 10 percent. In this context, the firm expects group revenues for the second quarter to be in line with current market expectations.
ARM.L closed down 0.4 percent at 869.00 pence.
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