Arm Holdings PLC (NASDAQ:ARM) reported better-than-expected earnings for the fiscal first quarter after Wednesday’s closing bell but shares of the UK-based chip designer plummeted after its guidance for the second quarter was merely in line with Street estimates.
For Q2, Arm expects revenue between $780 million and $830 million, or $805 million at the midpoint, slightly ahead of estimates of $804.1 million.
Earnings per share are expected to be in the range of $0.23 to $0.27, in line with the consensus $0.26.
Investors had been hoping for stronger guidance, particularly in the wake of rival AMD raising its guidance when it reported earnings on Tuesday.
Meanwhile, first quarter revenue came in ahead of Arm’s guidance range of $875 million to $925 million at $939 million, up 39% from the year-ago quarter.
EPS of $0.40 also exceeded the company’s guidance range of $0.32 to $0.36.
Analysts had expected EPS of $0.35 on revenue of $906.9 million.
Shares of Arm were down 7.1% at $133.87 shortly after the release of its earnings report.