(RTTNews) - Semiconductor intellectual property supplier ARM Holdings Plc (ARMH: News , ARM.L) reported Tuesday a decline in third-quarter profit, hurt by higher operating costs mainly due to restructuring charges. Revenues increased 5% helped by strong dollar against sterling, while dollar revenues decreased 8% from last year. ARM also reaffirmed that it expects group dollar revenues for the full year to be at least in line with current market expectations.

The U.K.-based company's profit before tax for the quarter declined to GBP 7.66 million from GBP 15.76 million in the previous year.

Results for the quarter include restructuring costs of GBP 6.56 million, acquisition related charges of GBP 3.64 million and share-based compensation and related payroll taxes of GBP 6.28 million. Excluding items, normalized profit before tax slightly decreased to GBP 24.26 million from GBP 24.88 million a year ago.

Profit for the period was GBP 6.89 million or 0.5 pence per share, down from GBP 11.27 million or 0.9 pence per share in the prior year. Normalized profit for the quarter slightly decreased to GBP 17.46 million or 1.34 pence per share from GBP 17.74 million or 1.38 pence per share a year ago. Earnings per American Depositary Share, or ADS, for the quarter was 2.5 cents, down from 4.7 cents a year ago. Normalized earnings per ADS were 6.44 cents, lower than 7.41 cents last year.

Total revenues for the quarter increased 5% to GBP 75.16 million from GBP 71.66 million a year earlier, due mainly to the strengthening of the dollar against sterling. Product revenues grew to GBP 70.72 million from GBP 67.68 million in the year-ago quarter. Service revenues improved to GBP 4.44 million from GBP 3.99 million in the same quarter last year.

In dollar terms, revenues decreased 8% to $123 million from $134.4 million in the previous year. Total dollar license revenues fell by 14% year-on-year to $39.7 million, which represent 32% of group revenues. Total dollar royalty revenues declined by 6% to $62.3 million, representing 51% of group revenues. Sales of development systems were $14 million, a decrease of 4%, which represent 11% of group revenues. Service revenues, representing 6% of group revenues, decreased 9% to $7 million.
Total cost of revenues decreased to GBP 5.77 million from GBP 7.48 million in the preceding year.

Total operating expenses grew to GBP 62.15 million from GBP 49.65 million in the previous year. Research and development expenses increased to GBP 27.09 million from GBP 21 million a year ago. Sales and marketing expenses were GBP 15.03 million, up from GBP 13.83 million in the prior year. General and administrative expenses also rose to GBP 20.03 million from GBP 14.82 million in the comparable quarter last year. Normalized operating expenses for the quarter were GBP 45.99 million, higher than GBP 40.8 million last year.

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