ARM 1H revenues grow but profits slip: sees improved conditions in 2H

ARM Holdings plc (ARM.L), leading chip designers, said its dollar revenues grew 11% to $258.4m in the half-year ended 30 June, while pre-tax profit slipped 8% to £44.1m.

The company was affected by seasonal slow down in demand in the semiconductor industry as well as an industry-wide inventory correction, and got no help from the sterling/dollar exchange rate.

CEO Warren East (pictured) said: “We are encouraged to have grown dollar revenues … against a challenging industry backdrop, compared to overall semiconductor industry revenues which grew less than 5%.

“A record quarter for licensing of ARM processor technology in Q2 enhances our prospects for further penetrating mobile and non-mobile markets in the future. In addition, good revenue growth and continued cost discipline have enabled us to increase profitability despite the continued strong currency headwind.

“Overall, ARM is well-positioned to benefit from the generally-anticipated improvement in industry conditions in the second half and we are confident of achieving full-year earnings in line with expectations."

The share price slid almost 3% to 143.5p on the news. ARM is now valued at just over £1.9 billion.

Trading

The Cambridge-based ARM, the largest firm in Silicon Fen by market capitalisation, said the first half of 2007 had seen very strong licensing in the Processor Division, up 25% year-on-year, which will underpin growth in royalty revenues, both in mobile and non-mobile markets.

In the short term, royalty revenues have been impacted by normal seasonality, the industry inventory correction and lower utilisation rates in the foundries.

Reiterating comments in February, it said 2007 is expected to be a year of productivity enhancement and acceleration in operating leverage following a year of high investment in headcount in 2006. Normalised operating margin in Q2 2007 of 32.0% was up from 30.3% in Q1 2007 and 29.0% in Q4 2006, in spite of further weakening of the dollar against sterling.

“We enter the second half of 2007 with a strong order backlog and a healthy licensing sales opportunity pipeline across the business. Further, royalty revenues are expected to benefit from the generally-anticipated improvement in industry conditions in the second half as the impact of the inventory correction reduces, foundry utilisation rates increase and the momentum behind smart phone sales gathers pace. As a result, although the pace of improvement in industry conditions is uncertain, assuming the dollar/sterling exchange rate remains similar to the effective rate reported in Q2 2007, we are confident of achieving full-year earnings in line with expectations,” the company said in a statement to the Stock Exchange.

26th July 2007


Previous articles
Screen Technology says supplier delays will hit sales this year
ARM cheers up market with record revenues, earnings in 4Q08, FY08
Potential MMI investors not best pleased with unsettled claim by former boss
ARM Holdings results hit by weak dollar; share price sheds 12%: but has high order backlog
Cambridge Display Technology 3Q revenue, profits down as industry R&D spending slows
Global Point-of-Care diagnostics market to soar; NHS to slow adoption in UK
Cambridge Consultants moves CEO to US; to expand Cambridge Science Park operation
Autonomy named ‘09 ‘trend setter’
Briefs: Autonomy signs $20m deal; University investigates Web 3.0 for learning tools
A tough month in Silicon Fen: Autonomy, nCipher star, others awash in red ink
Subscribe

 

Managed Hosting by NTT Managed Hosting
SEO London by IdeaTaxi.com
Corporate profiles

 • Esprit Capital Partners


Robert Hook
Chairman


In August 2007 Draper Fisher Jurvetson acquired a strategic stake in Esprit Capital Partners, one of the largest and most experienced teams of technology venture capital investors in Europe. Esprit Capital Partners was created as Cazenove Private Equity merged with Prelude Ventures to establish a

[Esprit Capital Partners's profile]


Top20 Index




Currently: 130.81

Best Mortgage Fixed Rates
You often pay slightly more for a fixed rate mortgage, but then you do have added security.

marcusevans
For excellent courses that can be used at a variety of levels many companies choose Marcus Evans.

Marcus Evans scam
Marcus Evans scam prevention conferences will help you to detect and deter fraud within your company.

International Ferro Metals
View the International Ferro Metals website for news, articles and presentations.