logo-loader

ARM profits rise but royalties a concern

Published: 15:40 22 Jul 2015 BST

5434171147_d5e99059c5_o
ARM is entering H2 with a robust line-up of licensing opportunities.

--- Adds share price and broker comment ---

Chip-maker ARM Holdings (LON:ARM) announced higher first half profit but said it expected only a small rise in second quarter industry-wide revenue.

ARM said normalised pre-tax profit in the half-year to June 30 rose 28% to £244.4mln on a 22% increase in revenue to £357.1mln.

The group increased the interim dividend by a quarter to 3.15p per share.

It signed a record 54 processor licences for a broad range of uses, from biometric sensors for mobile payments to automotive engine control, during the period.

The company also shipped 3.4 billion ARM-based chips, up 26% year-on-year.

It said it was entering the second half with a robust line-up of licensing opportunities.

But it said: "Available industry data for the second quarter, being the shipment period for ARM's Q3 royalties, points to a small sequential increase in industry revenues.

"Royalty revenue can grow faster than the overall industry due to increasing royalty per chip in mobile devices, and share gains beyond mobile.

"Assuming macroeconomic uncertainty does not further impact consumer spending, we expect overall group dollar revenues for full year 2015 to be in-line with current market expectations."

Chief executive Simon Segars said the second quarter had been strong for the company with a diverse range of major companies licensing ARM's latest processors and physical intellectual property for product development.

"ARM has been investing in advanced technology products for mobile devices, automotive applications and enterprise infrastructure, and in Q2 ARM signed licences for many of these new products," he said.

"This licensing activity will help to grow the royalty revenue opportunity for years to come."

Shares in ARM fell 63p to 976p following the announcement, although technology shares were broadly down after results from Apple and Microsoft failed to impress.

Broker Charles Stanley upgraded ARM to 'buy' from 'accumulate' following the results.

The broker's Tom Gidley-Kitchin said: "All guidance for the full year was maintained.

"Investors remain concerned about a possible inventory correction, given recent ARM customer results, but ARM is not seeing that."

Oriole Resources outlines 2023 achievements and future exploration plans

Oriole Resources PLC (AIM:ORR) CEO Tim Livesey and chief financial officer Bob Smeeton join Proactive's Stephen Gunnion with details of the company's 2023 financial and operational performance. Livesey highlighted successful exploration programs in Cameroon, at the Bibemi and Mbe projects,...

1 hour, 4 minutes ago