Maija Palmer
Arm Holdings beat market expectations on Tuesday as strong sales of smartphones and tablet computers containing the UK company?s microchip designs led to a sharp rise in fourth-quarter revenues.
The company, whose chip designs are used in Apple?s iPhone and iPad, said pre-tax profits rose 45 per cent to ?69m in the fourth quarter, while revenues rose 21 per cent to $137.8m.
Around 2.2bn Arm-based chips were sold in the fourth quarter. Arm?s results follow forecast-beating results from Apple last week, which revealed that some 37m iPhones had been sold in the fourth quarter, against expectations of 30m.
Warren East, Arm?s chief executive, said licensing growth had been buoyed by more technology manufacturers choosing to license his company?s technology and predicted further market share gains as these customers added more products containing Arm-designed chips.
?We have seen our royalty revenue continue to grow faster than industry revenues as the Arm Partnership gains share in our target markets,? he said.
Apple?s new iPhone 4s model runs on a new Arm processor design that analysts believe brings in almost double the royalties per unit as previous models.
The strong results are in contrast to Intel, which warned in December that revenues would be reduced because of slow global sales of PCs and disruptions in the hard disc drive market.
Arm has also been boosted by increasing inclusion of its chip designs into other devices, from washing machines to smart cards.
The company, which has been best known for its low-power chips used in small, portable devices, is also increasingly moving into laptops and servers.
Microsoft?s new Windows 8 operating system, expected to launch later this year, has been designed to work with Arm-based chips and Nvidia, Texas Instruments and Qualcomm have all demonstrated prototype laptops running Windows 8 on Arm designs.
Despite recent economic uncertainties, Arm said it was confident of ?at least? meeting market expectations for dollar revenues of $860m for 2012, just under 10 per cent growth.
?2012 will bring exciting opportunities and challenges as Arm enters competitive new markets where we are well positioned to succeed with leading technology, an innovative business model and a thriving ecosystem of partners,? Mr East said.
The bullish forecasts come despite analyst estimates that global semiconductor sales fell 10 per cent sequentially in the fourth quarter.
The company also lifted its final dividend by 20 per cent to 3.48p per share.
Pre-tax profits for the full year were up 37 per cent at ?229.7m, on revenues of ?491.8m. Earnings per share rose 33 per cent to 12.45p. Arm shares, which have gained 23 per cent over the past year, rose 6.5 per cent to 636.5p in early trade.
Additional reporting by Jonathan Moules